Appreciating Home Prices

* Re “Going Unappreciated in O.C.,” Jan. 4:

While it is certainly true that there are specific areas and pockets of homes that have not realized much [price] appreciation, there are other factors that must be considered.

There are important rules to be followed in purchasing a home--starting with location, location, location.

It is most prudent to buy the smallest, cheapest house in a particular neighborhood, so that appreciation will accrue because of other homes that sell for more.

You mention that the median price in the area where the Martinez family lives is $143,454, and that they are asking $165,000. What we don’t know is whether the Martinez family paid less, the same or more for their home than the surrounding homes? Was it a smaller home in an area where there were some houses that were slightly larger and might sell for a few thousand dollars more?

More important, you mention that they put improvements into the house and were asking a price to include the cost of the improvements. The Times has had many articles on home improvements and home additions, and this is always a tricky business.

Did the Martinez family over-improve the house? Did they consult a real estate agent in the area to ask if there was a possibility to get their money back from their improvements? It is rare for homeowners to realize 100% of their investment on almost any home improvement.

The Martinez family is probably unrealistic about their price. Maybe they will get up to $10,000 more than the going neighborhood price, if their house is perfect, shows like a model, and has the improvements another buyer specifically wants and is willing to pay for.

If they wait until their area appreciates enough for them to sell at $160,000, the house they want to buy in Costa Mesa will also have appreciated and will probably be out of reach. Like so many other sellers, the Martinezes need to research this fully, and then bite the bullet, get what they can get, move on, and learn a lesson from this experience.

LESLIE GIACOBBI

Anaheim Hills