Older homes are holding their value far better than newer ones
Posted January 4, 2011 at 1:02PM
Older homes, typically located in more walkable and centrally located neighborhoods, hold their value much better than their newer counterparts.
In particular, from the beginning of the last decade until about 2004, average homes appreciated in value without much variation according to when they were built, according to a graph reported last week by Lorena Iñiguez Elebee in the Los Angeles Times, But, as the decade went on, a marked difference emerged in the degree to which average home prices changed, with older homes performing decidedly better than newer ones, and by wider average margins as the decade progressed.
Over the decade as a whole, homes built in the 1930s appreciated 97 percent, while those built in newer subdivisions from the 1990s appreciated only 12 percent. The differences began to surface around 2005 but remained modest while overall home prices continued to go up, until 2007. Since the 2007 crash, however, prices for homes built more recently declined at sharper rates, with the differences among the three studied categories of southern California homes growing more and more pronounced. All three categories declined after 2007, but to different degrees. This, of course, is fully consistent with the price and foreclosure trends I have reported based on regional geography (see here and here), but it is the first time I have seen information differentiated specifically by the age of housing.
According to the Times, the data were derived from the DataQuick price-change index, which I believe is published at least monthly. Thanks to Peter Jacobsen for pointing me to the story.