The home above is for sale in Alpharetta. It is not far from my house and as a result I have watched it experience the wild fluctuations of Alpharetta’s real estate market for nearly a decade. I do not claim that this home is representative of the overall market in Alpharetta but I do think its history is an excellent example of what has gone on in our local real estate market. I also think the history of this home can help people outside of the real estate profession gain insight into what is going on around them.
The home in the picture is a 5 bedroom brick home on a lot of about a 1/2 acre in a very nice subdivision in Alpharetta. It was built in 1993 and according to the tax records it is about 4300 square feet with a 2200 square foot finished basement. The home has a three car garage. It also has granite countertops and the floors are mostly marble and hardwood. It also has a beautifully landscaped, heated inground pool in the back yard.
According to tax records the home originally sold for $464,500 in 1993. Then according to records the original owners lived in the house for 11 years before selling it in 2004 for a price of $740,000. That is about 60% more than the original owners paid. When the home sold in 2004 I had just recently moved to the area and was glad to see that kind of appreciation close to my new home because it would help increase the value of my home as well. You know the old saying, “The rising tide raises all ships.”
In 2006 the home sold again. This time the sale price was $850,000. At the time I was surprised because even though it was a beautiful home I just didn’t believe the home had appreciated so much in such a short period of time. While there were homes nearby that sold in the price range those other homes were either much larger, nicer or on the lake. The comparables around us just didn’t support the sales price but it was a time of irrational exuberance and given the lax mortgage underwriting standards of the time the loan was made.
Fast forward to 2011. The home was listed on the market for $549,888. After a few weeks on the market the price of the home is now down to $499,888. The home is scheduled to be sold in a foreclosure auction on the steps of the Fulton County Courthouse next week.
So a home that originally sold for $464,500 in 2003 rode the real estate bubble to a price of $850,000 13 years later. And in the 5 years since that time the real estate market has plunged to the point where a bank will be fortunate to get the original sale price of $464,500 for it.
Sadly, just as the home’s rapid rise in price helped increase the values of surrounding properties it is now helping to drive down the values of those same homes. A rising tide does indeed raise all ships but a dropping tide also lowers them.