I continue to be amazed at how our home values keep increasing in our neighborhood. Prices are going up so much, that it almost makes me wonder when they’ll come back down. At some point, with interest rates going up, and prices going up, there won’t be any buyers that can afford to buy these houses.
When I moved in to our house 3 years ago, it cost me $280k. Granted, that was a good price at the time because I bought it from someone that hadn’t listed it yet and had some leverage to get the price down. But, get this. A house just went up for sale in our neighborhood for $435K. This house is smaller and not as updated as our house. Even if it ends up selling for $400, that’s still a $40K per year appreciation. Surely this won’t last.
So, what does this mean for me? Not much really. Rather than use this equity to buy more crap, we are actually accelerating the payments on our mortgage. So, if the prices do come down some, I just won’t be quite as well off. No sweat. I’ve got many years to see this house appreciate. My goal is to pay this house off in the next 15 years. It probably doesn’t sound very aggressive, but I have a 30 year loan on our house. Cutting that in half works for me.
I really hope that my neighbors aren’t all spending this new equity, although I know that some of them are. I hope they can afford to live here for the long term because I like them!