Real Estate Depreciation Report February 3, 2009
Recently, we published a blog article on how to measure real estate depreciation. In this article, we pointed out that the only true way to measure real estate depreciation is to take a large enough sampling of recent home sales and compare them with the previous sales of the exact same homes.
This is a very tedious process and not many people have the time or resources to do it. But there is another way that we can measure real estate depreciation and appreciation that is fairly accurate, and that is the trending measurement of square footage values over time.
Rather than focus on average home prices, we focus on average price per foot over time. If we measure the trend of average values this way, we can get a realistic view of how much the real estate market has depreciated.
In the real estate graph above, we see average home values (broken down into 6 different size categories) and how well they have done in the Tallahassee real estate market. The overall market average in red is down 15% from the peak of the market 3 years ago.
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