Tuesday, June 5, 2012

What is your house worth? When?

Last week I had the opportunity to reflect on one of the most interesting financial cycles.  In Seattle there is a neighborhood called Leshi.  It was developed in around 1900 by the very wealthy of the city.  The huge Victorian homes have been standing for more than 100 years.  They are three and even four stories high with all the scrolled detailing both inside and out that marked the era.  Clearly the homes of the wealthy.

Time passed and the neighborhood went into disrepair.  The aged homes were vacated for newer more modern homes outside the central area of the city.  They were purchased at lower prices and as the times changed they were often divided into multiple units and rented as apartments.  The neighborhood continued to decline and crime continued to rise making the area not only undesirable but even unsafe to live in.  Those who stayed were limited in funds so the houses stood unchanged except for a coat of paint or a maintained lawn.  Some were even boarded up and left in their standing condition.

The city continued to grow and sprawl for miles while the rhododendrons and roses continued to grow and bloom in Leshi.  Families moved in and families moved out and blocks away gunfire often sounded striking down the lives of those who lived there.

Then a turning point came and the old grand houses became noticed again.  The proximity to the city business was just a short drive or bus ride away.  The homes began to be purchased and restored and renovated to their original grandeur.

The view of Lake Washington and the Bellevue skyline which did not even exist now graced the view from the balconies.  I was told that even a home that had not been renovated except for a coat of paint was now $800,000 and the prices only went up from there.

I had the opportunity to stay at one and I could not help but run my hands down the original 5 panel doors with their crystal doorknobs and walk across the original hardwood floors.  Beautiful!

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