Having perused today’s doom-and-gloom piece in the Times to the effect that property values in my neck of the woods have dropped 50 percent in the past three years, I was moved to visit Zillow by way of checking up on the current value of my real estate empire.
Lo! Zillow’s estimate of my house’s value is $293,000! That’s $61,000 more than I paid for it five years ago, an increase of about 4.75 percent a year. Not great appreciation on investment, but one heckuva lot better than the negative numbers we’ve experienced in stocks and bonds.
Meanwhile, the downtown house that M’hijito and I are copurchasing comes in at $177,000, a whopping $58,000 less than we paid for it and $34,000 less than we owe. That’s more like the stock market we know and fear.
Our lending agent at the credit union points out that the depressed value in what ought to be a stable centrally located neighborhood came about because a high number of foreclosures is pushing prices downward. Indeed, the house directly behind his was foreclosed; the bank recently unloaded it for $153,000, and the house is 100 square feet larger than M’hijito’s.
That house was bought and lost by a speculator who was halfway through renovations when he defaulted. The kitchen and front rooms were redone, but the rest of the house is stripped down to the concrete and needs significant fix-up. The yard, of course, also needs a lot of work. Meanwhile, a house at the corner of his street and a main drag is valued at $227,000; that place has been in foreclosure not once, not twice, but three times. It presently has an auction sign out front.
Even though things aren’t looking so good there, the lender says we should wait another nine months before assuming our shirt is lost. She says their appraisers have found that when a series of foreclosures pushes values down in a neighborhood, prices start to recover after about that length of time. In discussing the matter, she remarked that the area, within walking distance of the new light rail line, can be expected to recover its value over the next few years.
Assuming we believe Zillow’s Zestimates (a big assumption, that), it looks like our real estate investments are about a wash just now: a gain of $61,000 less a loss of $58,000 leaves us $3,000 to the good. Still better than the stock market, eh?
Out of idle curiosity, I checked the house SDXB sold five years ago, one street to the north of me. Zillow values it at $314,500, up from the $215,000 or so he got for it. The slum house directly behind his (well, “formerly his”), which was allowed to run to ruin by its original slob owners, then absorbed into Mr. B***’s rental empire, then sold at the top of the market to a couple who did some serious fix-up but soon divorced and turned it back into a down-at-the-heels rental, supposedly is worth $305,000.
La Maya and Bethulia’s house, around the corner and in the ritzier part of the neighborhood, sports a $392,000 Zestimate, almost a hundred grand more than they paid for it. My old house, about two blocks away, is valued at $243,000, having been bought out of a short sale for $253,000 a year ago. I sold the house to the woman who defaulted on it for $211,000, so even given the foreclosure, the house’s value has increased over the past five years.
My old friend’s house in Moon Valley shows a value of $273,000, a lot less than I would expect but still more than she and her husband paid five years ago. They’ve put more into the house’s renovation than it has allegedly appreciated. Interestingly, Moon Valley, arguably a nicer area than mine because it’s free of bordering slums and is built around a very attractive country club and golf course, seems generally to be exhibiting depressed property values; five years ago I couldn’t touch a house in that area, but now many apparently are worth less than the house I’m in.
And what about my beautiful old house in the Willo Historic District, a place my ex- and I were crazy to have sold? Five hundred and eighty-one thousand dollah.
How crazy were we to have sold that place? Crazy as foxes. His house—the one we moved into—is now $607,500. Allegedly.
Mwa ha ha!
Of all the shacks in my present and past real estate empire, my current house is far and away the nicest. M’hijito’s is cute but needs more fix-up to qualify as cuter than cute. My house is newer than the ex’s, ever so much more snazzily renovated, with a real garage and a gas range and beautiful Mexican tile and skylights in three rooms and a gorgeous pool. The house in Willo is now 80 years old, all very quaint and all very expensive to keep shored up; it’s sandwiched between three heavily traveled streets with a fire station just down the road. My house has a beautiful park within a three-minute walk, and it’s located so far from every main drag that it’s quiet—something you can say about very few houses in grid-patterned Phoenix. Yet, like all the other houses, it’s centrally located, and soon it will have easy access to the wonderful light-rail system.
So…whatever’s happening, none of us seem to have lost 50% of the value of our homes. As in other parts of the country, the real estate crisis works on micro-local levels. If you bought in one of the new Styrofoam-and-plasterboard suburbs that were tossed together on Sonoran desert habitat the developers were blading at the rate of an acre an hour, you got shafted. But if you bought in town, sticking to a centrally located part of the urb, you spent a little more on real estate, got block construction and a big yard, saved a lot on gasoline, and probably did OK on your investment.