Older Homes Appreciating Faster

Hurley and Patterson CousinsThe Seattle Times had an interesting article that describes how home values of older homes have increased at substantially faster rates than new homes:

New homes may have the latest of everything, but as an investment, a new house simply does not bring the returns that an older home does. Countywide over the past five years, new houses have posted 4.8 percent annual appreciation, while older homes saw about 7 percent. In the past year, new houses appreciated 7.5 percent compared with old houses’ 10.4 percent.

I don’t think many Seattle agents would find this information surprising as most homes as so many of the homes around here have increased in value substantially over the past few years. My experience has been that there is a large subset of home buyers that are looking for homes with character in established neighborhoods. In an area like Seattle with very few new homes being built each year, people are finding ways to fix up old homes in ways that make them shine beyond a typical “old” home.

Most importantly, assuming an old home is located in a nice neighborhood, it is relatively easy to add $100K to $200K through straightforward improvements (update kitchens, build out basements/attics, etc), whereas the opportunity to substantially increase the value of new homes is more limited.

This same report included data on the medium home values for Seattle/King County. If you drill down through their menus, you can find out how many homes were sold in your neighborhood, along with the percent that were new and median price.

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