The Value of Home
Much is being made of the current price of lumber. Building homes has becoming increasingly more expensive throughout the COVID-19 pandemic. A variety of headwinds, including but not limited to trade tariffs, decreased production, destructive wildfires, and more have all lead to rampant increases in the real estate market.
But 2020 isn’t the only year local home values have seen growth. The greater Waco area is experiencing extraordinary growth in real estate values. In fact, we did a little comparison. The first homes NeighborWorks Waco ever built were completed and sold in 1998. Their value at that time was $58,000 each. Today, 23 years later, the McLennan County Appraisal District (MCAD) values those homes each at about $140,000. That is a total 140% increase in value! Most of that growth came in the last five or six years.
In 2001, NeighborWorks Waco started building Pecan Valley Estates–the first new neighborhood built in East Waco in 40 years. The first house in that subdivision was worth $76,000 at the time. Today, MCAD lists the home at a value of $112,000, though I suspect it would sell for more in this market. A 47.5% increase over 20 years is remarkable.
To really display the markets’ recent growth, we looked at four homes built in our recent Legacy Square subdivision. The average value of these four homes. These homes were each worth about $97,000 in 2016. Today, only 5 years later, the homes have appreciated an average of 38% to a value of approximately $134,000.
The secret is out: Waco is a great place to live, work, and raise a family. Waco is a hot spot, and real estate may continue to increase in value. For families that purchased their home decades ago, this means a substantial increase in wealth. For those who have not yet achieved their dream of homeownership—what are you waiting on?
It has been said that the best time to plant a tree is 20 years ago, and the second-best time is now. Building equity in one’s home, growing wealth, and taking advantage of the housing market is similar. The best time is years ago. The second-best time is now.