I was talking with a Columbia home seller the other day about the real estate market, falling prices, etc.  She bought her home just a short while ago and had added a lot of improvements and was figuring her homes value with a formula like this: Purchase Price + Cost of Improvements = New Value.  (The Chicago Sun Times had an interesting method for “calculating” home values here).

I said, no, it doesn’t work like.  Buyer’s don’t care what you paid, for your home or improvements. All they care about is what does your home offer, by way of price and features, compared to other homes on the market today (and compared to homes just recently sold).   Yes, Howard County homes have traditional held their value – but still, your home’s value today is largely determined by what your neighbors are willing to sell for. (Request “Recent Sales In MY Neighborhood”, fee, at our main webpage).

This got me to thinking – I wonder how far home prices in Howard County Maryland really have fallen over the past few years?  So I did a little research.  I looked up ALL single family home sales in a Columbia zip code – 21045 – from July 1 through November 30.  I found 82.  I then checked the tax records on these homes to see which ones had previously sold in 2004 or later, and found 23.

I then took these 23 homes, each having sold once in 2004 – 2007 and then selling a second time in July-November 2008, and compared the first sale price to the second and discovered the following:

Howard County home sellers who bought in ’04 and sold in ’08 had a 2.8% price increase.

Howard County home sellers who bought in ’05 and sold in ’08 had a 13.8% price decrease.

Howard County home sellers who bought in ’06 and sold in ’08 had a 18.5% price decrease.

Howard County home sellers who bought in ’07 and sold in ’08 had a 14.2% price increase.

Wow.  National reports indicated that, on average, homes across America in 2008 were selling for 2004 prices, and Howard County home sales seemed to be following that trend.  What seemed most painful was for owners who bought in ’07 and sold just one year later for a 14.2% loss.

If you’d like a copy of the Excel spreadsheet used for my calculations, or other market info (including a Quik-Value of your home by email), just visit our primary webpage and request “2004 – 2008 Home Price Comparison.”

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