Quote:
Originally Posted by safari
I don't want my house to appreciate much because I am planning to buy a bigger house when I start a family. If all houses appreciate in value, I'd have to pay more to upgrade a house. For example, if my house costs $500K and I want to buy a house that costs $1 mil, the difference is $500K. If houses appreciate 20%, my house would cost $600K and the other house would cost $1.2 mil, which means I'd have to pay $600K difference to upgrade the house. That's why I am hoping that house prices continue to plummet.
|
basic supply and demand.
The two houses would not appreciate at same rate, IMO.
The cheaper the house, the less (as a percentage) it appreciates.
The more expensive the house, the higher the rate of appreciation. Might be 3% to 3.5% or 3% to 3.25%, but the more expensive house will
a) maintain it's value better
b) appreciate at a higher percentage
c) in general have lower supply
d) this assumes the more expensive properties are in desireable locations as well (demand is higher).
A house in Manhatten or SSF Bay area is more expensive now, and they appreciate at a higher rate (because supply is limited and demand is high) than my house in Ohio.
Yet my house in Ohio is probably much bigger and has a bigger lot than a house of the same price in either location and I sit on only 1/3 of an acre with 3200 sq ft for 350k- my sister told me the same house on Long Island would be 750k or 1000k. The long island house probably appreciates at 4-4.5%, where in Ohio I probably get 2% per year if I am lucky.
In the example given above (500k house and 1000k house), if the 1000k house is in a better neighborhood/location, expect it to appreciate at a rate higher than the 500k house.