June 28, 2010


Filed under: Uncategorized — admin @ 2:44 pm

For the last two years, the ever-reliable has claimed that my house has been steadily and significantly going up in value, while Saint Louis as a whole was going down. While some of that spread can be attributed to the neighborhood (which is quite nice), I attribute most of it to a bad model. When I checked today, I noticed that the valuation has gone down quite a bit. I’m not very surprised, as I don’t think the house was ever worth what they thought it was, but I find myself strangely unmoved.
We’ve owned the house for 2.5 years (17.5 to go!). Just recently, it crossed the point where the amount we were receiving in rent was greater than the interest and fees. Therefore, we are converting cash into equity at an efficiency of 1.0 or greater (presuming the value of the home doesn’t drop wildly of course).
Through the beauty of math, this house is now basically an auto-debiting, long-term, low-interest savings plan which will likely result in a place to live when I retire on my fat pension. A flawless real estate plan, since housing never drops in value =)

1 Comment

  1. I like looking at it that way, and I hope we’re right.

    Comment by Mary Ann — June 29, 2010 @ 9:18 pm

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