VOCAL Neighbors

Another Myth Debunked - Property Values Will Not Decrease After Landmarking

There has been a suggestion that under landmark distric status, Lincoln Park property values will continue to appreciate at the same rate they have been, and that the appreciation rate will not slow. Guess what?

WRONG.

Here is my take on it:

From what I can tell, the Mid-North Landmark District homes that are owned fee-simple (i.e., not condos, etc.), that were turned over in about the past 15+ years had an annual appreciation rate of about 15%, and were owned for about 4.3 years on average.

Lincoln Park residential properties (again, non-condo) that were sold and resold over the same approximate time frame had an annual appreciation rate of 21.27%, and were owned for about 4.8 years.

The average sale price for homes in the area was about $1.1 million dollars.

What happens if you do the math on the appreciation rates for the average holding period in Lincoln Park, versus the appreciation rate for the pre-existing Landmark District in Mod-North?

After five years, you LOSE at least $500,000.

Quick calculation:
(1,100,000 x 1.2)x1.2)x1.2)x1.2)x1.2) = $2.7 million non-landmarked district.
(1,100,000 x 1.15)x1.15)x1.15)x1.15)x1.15) = $2.2 million in landmarked district.

Difference: $500,000.

I don't know about you, but I don't have half a million dollars to give up on a vague theory or a promise that my property values will not be harmed by landmarking based on studies performed elsewhere. (Actually, I don't live in, and can't afford, a million dollar house, but even doing the same math on my humble home, we ain't talking chump change. It's certainly going to make a dent in the firstborn's college tuition costs...)

posted by The Grants @ 6:43 AM