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What is your home really worth?

In the midst of house hunting, a thought occurred to me: people put a lot of stock into their houses, their houses’ worth and even the municipal assessments… but all that goes out the door when you start trying to list your home for sale and no one is biting.


We’ve seen plenty of nice homes, (to us) worth about $400,000 given the location and how well-kept it is, going for $650,000.

The municipal assessments are at around $400,000 but in this market people think they can get $650,000.

Other things we’ve seen are people listing at the home’s municipal assessment (or that amount plus the realtor’s fee worked in), and even THEY aren’t moving off the market.


Because as it stands right now in this city, houses over $600,000 are dead in the water. No one is buying over $600,000, I daresay even over $500,000.

Everyone is in the $300 – $450,000 range and frankly, people who poured money into their houses thinking it was a sure bet to double in value, are sitting around, wringing their hands trying to get a bite, a nibble, ANYTHING that would even be remotely close to recouping their initial investments (never mind the loss of appreciation from inflation and how much you could have earned had you stuck it all in the market instead).


Some sellers we’ve met, are just damn desperate. They’re so anxious and desperate it is a little hard to take in, and those are the ones who already bought another home, are paying the mortgage on that one and are hoping to sell their current home for what they think it’s worth, totally unwilling to lose $100,000 in the process.

To put it another way, a house in a “good” area that supposedly keeps its value, is worth on paper $800,000 but I daresay in this market, if they truly had to sell it and get out, it’s not worth more than $450,000.

Is that worse or better than a house in a decent area that doesn’t appreciate quite as quickly as another area, which was worth $300,000 before and could sell in today’s market for $400,000?

I feel like it’s all net worth increases and happy rainbows on paper, but when push comes to shove to turn that asset into liquid cash, it is a whole other ballgame.

I wonder.


This is why, when we’re looking at houses, we are keeping these things in mind:

  • It is a house for us to live in, not to flip and resell.
  • It is not a starter home to upgrade from, it will be a home until we pass on.
  • It is a house that will basically be our prepaid rent until we die with very minimal annual costs in terms of taxes, utilities, maintenance, etc, versus renting (this we’ve done the math of, and is true).
  • It is a house we will not renovate and expect to get out more than we put into it save for inflationary increases (if any).
  • It is not a house we cannot afford just because we want a lot of space or something fancy (neither of which is in line with our minimalist principles).
  • Our budget is pretty much $450,000 all in. Taxes, notary fees, everything.
  • I will not count the house as part of my net worth; I may use the municipal assessment as a way to keep track of my money (it is worth SOMETHING after all), but I will not try and think in any given market, I will get a return of 100%.

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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  1. LAL

    I am unsure if where we are renting now we is overheated and a bubble. I worry about buying next year

    1. save. spend. splurge.

      I’m worried about buying as well. I feel like I ought to wait.

      1. LAL

        I noticed a few houses are going under list value right now. I think that the market is cooling even if people won’t admit it.

        1. save. spend. splurge.

          Agreed. Condos especially.

  2. Corianne

    I also cannot imagine getting a “starter home”. It’s still far away, but my dream of ever buying a house definitely consists of a place that I’ll live in forever/a very very long time or is some sort of home base. And to modify it in a way so that *I* can enjoy it – not the next buyers.

    It might be the time in which I grew up. I turned 18 in 2006. So for most of my adult life it’s been ECONOMIC CRISIS HERE, ECONOMIC CRISIS THERE. Nobody ever seems to be able to sell their home… at least that’s the impressions that I’ve had for most of my adult life. So, no, no starter home for me.

    (Not to mention the crappy job market nowadays. Without a permanent contract, it’s hard to get a mortgage. And I know quite some people who cannot even get a temporary contract/job – there seem to be so many people still “looking”… And even if you have steady employment, it’s not so steady. A friend of mine recently “lost” her job, because they do not want to give her a permanent contract after she’s been working there 4+ years. She’s been on temporary contracts and after 3 extensions, employers have to offer a permanent contract. After working there 4+ years, obviously she’s a valued employee. What did they offer her instead? She had to “take 6 months off” and then they would offer her another temporary contract… Of course, she said goodbye to them.)

    1. save. spend. splurge.

      Employers are the same here. I know someone who is struggling to become a permanent..

  3. Kelly

    I think cost is relative to where you buy. We bought our home out of foreclosure for $51,500. Right now we have been paying it off and are down to owing 36,000. We just looked at a new home a fixer upper to be sure that was pretty nice for $27,000. Many homes in our area can be found for 30,000 or less.

    1. save. spend. splurge.

      WOw. $30,000. That’s just the price for me to put in a house stone surround I think.

  4. Hannah

    I think that there are many ways to intelligently purchase a primary home. With our last two home purchases we relied upon purchasing with a triple exit strategy. By that I mean we bought a property that we could reasonably expect to sell with appreciation, to rent it for cashflow, or to live in it at a reasonable cost.

    Our most recent purchase was a bit of a junker that we bought at what we determined to be a good value for the condition. We are fixing it ourselves so that we can either enjoy living in it should we stay in the area, or we can rent or sell at a profit in a few years. The current trends lead us to believe that any of these options could be hugely profitable for us, but we also paid only $65K for the house.

    1. save. spend. splurge.

      $65,000!! What a deal.

  5. Taylor Lee @ Engineer Cents

    Your house is worth what the market at the time will pay for it. Municipal assessments in my area are a joke and easily 30-50% less than true market value. Comps to similar sold houses in the area are the best way to determine the going rate for a place.

    1. save. spend. splurge.

      Exactly. Either a lot, or not a lot, but the market dictates the prices, not some assessment which is just a way to figure out a fair way to tax people on a sliding scale. Houses are investments like stocks — they go up or down and when you want to sell, it’s at the time of sale that the market determines its value.

  6. Revanche

    Honestly I’ve considered taking our home out of the net worth assessment but I don’t. As long as the mortgage stays on the liability line, then the assessed (value our taxes are based on) value will stay in the asset column. I also tally our rental in there in the same way. I’m responsible for that mortgage and I own it so there’s no point in not counting it.
    But really, just like stocks, if it’s worth X today but only sells for X minus 100k years down the road, that’s got nothing to do with present day net worth. It’s basically the same as stocks I figure just because you bought at $30 today doesn’t mean you’re guaranteed a minimum of $30 in value at any time so as long as you remember that net worth is fluid and mostly a snapshot in the time period it was calculated then there’s no harm in including the value.

    1. save. spend. splurge.

      I’m considering just putting the market price which is half what we paid for it today … or just the municipal half. Haven’t figure out a formula yet.

  7. Abigail @ipickuppennies

    Yep, in order to protect your money, you can’t see your house as anything but an investment in an eventual end to rent. Which is why I didn’t understand why people were walking away from mortgages they could afford because the place “wasn’t worth what we paid.” Beyond the fact that housing prices will rebound over time, it’s a place to live! Sheesh.

    But I digress. You’re being smart about it. You buy the house you want to keep long-term. (Starter homes always struck me as a weird concept.) You decide exactly what you can afford, and you view the home as a way to avoid rent in the future. Nothing more. Using your method, you won’t find yourself in the situations of so many homeowners.

    1. save. spend. splurge.

      Pretty much — you need to live SOMEWHERE, so where are you going to live if not there?

      I hate the starter home concept too. That drives me mad, all that wasted money.

  8. StackingCash

    A subject dear to my heart. Real estate is a finicky beast. I’ve seen it make and break people. As always there are only 3 rules to it. 1. Location. 2. Location. 3. Location. That’s it! Of course there is the structure on top of it but that can be adjusted to one’s tastes.
    In regards to the current boom in prices it is only because the interest rates are so low. IF interest rates go up, which I doubt (the Fed is backed into a corner) we will be seeing another bubble burst.
    Sellers are usually delusional because most of them have an emotional attachment to their “home.” They don’t realize it is only a “house.”
    In regards to New Zealand, it sounds like the business to be in is in home construction. I wonder if there are any builders I could invest in…

    1. save. spend. splurge.

      Location is definitely it for me. I would not want it near a train station, or a highway, or anywhere with noise and so on. I can’t believe sellers who think that the noise is no big deal, can ask the prices that they do..

  9. Leigh

    I bought my two bedroom condo 3 years ago now for around $350k. The market was much different then. I bought at the bottom. Last year, similar places were selling at around $450k and one just sold for $475k. I have a mortgage, so I do count my condo in my net worth since I count my mortgage in there. I also track non-property net worth and that number is honestly more important since a $100k increase in my condo’s value doesn’t increase my freedom. If I sold, we would have to rent somewhere and rent is getting insane now, so we might as well stay here where my monthly carrying costs are around $700/month plus the small bit of interest left.

    Some of my friends are buying houses now and I’m so glad we’re not trying to do that because they are so expensive in the city.

    I bought this place thinking it could grow with me for 5 years. I’m so glad I didn’t buy a one bedroom as I think this place could he our forever home if we don’t have kids, but even if we do, that’s probably at least 5 years out, so we could very well get at least 8 years out of this place, which isn’t bad considering I bought it at 23. The sweet thing too is that with when I bought, we’re not going to get priced out of this neighborhood like other people are, since I have the stable costs of homrownership rather than the annual 5-10% rent increases.

    Housing is an interesting beast.

    1. save. spend. splurge.

      Oh I agree. You did it the super smart way.

      For me, if you sold your place and took the money, you still have to live somewhere, so you’d have to rent or buy another place anyway.

  10. Heather H

    Having owned 7 homes (all personal, no rentals) I can attest to the comment that it depends on your actual market and also timing. Housing goes through cycles just like the stock market and I have seen many of those cycles since purchasing my first home (a fixer upper) at age 24. We were never flippers exactly but have always improved our homes and have never lost money, though we did barely break even a few times. Just like the stock market, buying in a down cycle is preferable when you can make that choice.

    My approach is different, perhaps because we’ve moved so much, that I do not assume I will live in any home forever and I ask myself before buying – will I be able to sell this if I have to? Is it an attractive location and home that other buyers will want it in the future if my job or life changes necessitating a move? That goes along of course with whether I love it as well.

    Whatever upgrades I do are for my personal pleasure, however I am careful to do them tastefully so other future buyers will hopefully like them. It confuses me when sellers do a ton of upgrades right before placing it on the market, they could have done it years ago and enjoyed those upgrades themselves.

    1. save. spend. splurge.

      This is why we plan on really doing up the house the way we want it to be done so that we enjoy those upgrades of hardwood floors and so on. What’s the point of waiting until you sell?

  11. Tre

    It is important to understand the market you are selling in. In the market we’re looking in, houses are going under contract the day after the come for sale. I need a little more time to decide if that is the house I’m going to spend the next 10+ years in.

    1. save. spend. splurge.

      I think some sellers are delusional

      1. Tre

        My husband was when we listed our house. It took a lot of work by our realtor to get him down to a realistic price.@save. spend. splurge.:

        1. save. spend. splurge.

          Well.. people get sentimental and attached.

  12. SarahN

    Hmmm, I do look forward to reading when you have a home, and as the years progress, as there is a level of upkeep. But you may find, as an owner, a desire to modernise even cheaply, which is contrary to what you are mentioning above.

    As NZ Muse said, Australia and NZ are still booming, and have been for twenty years. There is endless articles about a bust etc, but whilst population outstrips homes on the market (not enough new stock, but also more investors as there are great advantages over shares), it will continue to push prices up.

    I bought for about $465k for a 1/1/1 and in my building (albeit higher up, so better views, and a different floor plan), selling in the $600s! And this is three years on. Nonetheless, I will only sell this property to purchase a ‘forever’ home. Yes, it’s mortgaged, but I have 20% equity at the purchase price. And I’d happily live there if I didn’t marry/have kids (ie expand my needs).

    1. save. spend. splurge.

      It is pretty crazy to think of housing being completely unaffordable. How do people buy places without a huge income?

  13. NZ Muse

    Ugh, I wish this was true in our market. The population is exploding, not enough housing is being built and renting blows. Houses here are appreciating at a rate faster than people’s salaries on a weekly basis. There are hardly any properties left under $500k. It’s really scary.

    1. save. spend. splurge.

      NZ is a scary place for that because there seems to be no rules in place for housing and protecting renters. You all need to come out of your shells and revolt


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Save. Spend. Splurge.
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