Real Estate
[TOP WINNERS] How Much Has Your Annapolis Home Appreciated?
What was the best year to have purchased a home in Annapolis for the highest appreciation over the last 20 years? Find out below!
Much in the world has changed in the past 20 years. As we enter a new decade, let's look back at what has happened in the Annapolis real estate market over the past 20 years and see how real estate has performed as an investment.
Often times we hear people say that buying their home was the best decision they ever made. Other times we hear that a substantial portion of their retirement is tied up in the equity of their home. So how much equity can be in an Annapolis home in the 21401 zip code purchased after 1999? This include neighborhoods such as Annapolis Neck, Crownsville, Naval Academy and Parole.
We crunched the numbers and calculated the total equity in the typical Annapolis home in the 21401 zip code purchased every year since 1999. For this analysis, we assumed that the equity in a home would be grow through appreciation and principle reduction. Appreciation is where the value of a home goes up over time as property values increase. Principle reduction is where the remaining balance of your mortgage goes down each month you make a mortgage payment. Click here to sign up for my free monthly real estate market update to stay current on the latest real estate market trends in your neighborhood.
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Median Sold Prices by Year
In Table #1 below, I’ve identified the median sold price for homes that have sold in the 21401 zip code of Annapolis annually for the past 20 years, going back to 1999. In 1999, the median sold price for a home was $176,500 and in 2019 it was $460,000. This translates to total appreciation of 161% or an annual appreciation rate of about 8.1%.
| Year | Sold Price (Median) |
| 1999 | $176,500 |
| 2000 | $189,900 |
| 2001 | $205,000 |
| 2002 | $249,950 |
| 2003 | $272,500 |
| 2004 | $362,000 |
| 2005 | $406,000 |
| 2006 | $424,950 |
| 2007 | $430,000 |
| 2008 | $395,000 |
| 2009 | $358,000 |
| 2010 | $375,500 |
| 2011 | $375,000 |
| 2012 | $358,000 |
| 2013 | $398,900 |
| 2014 | $395,000 |
| 2015 | $395,000 |
| 2016 | $397,000 |
| 2017 | $425,000 |
| 2018 | $435,000 |
| 2019 | $460,000 |
Equity From Appreciation
The table below highlights the amount of equity in a home gained through appreciation. This appreciation was calculated by taking the difference between the 2019 median sales price of $460,000 and the median sales price for each year from since 1999. For example, if you bought a home 20 years ago in 1999 at the median sales price of $176,500 you would have $283,500 in equity today through appreciation.
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| Year | Appreciation |
| 1999 | $283,500 |
| 2000 | $270,100 |
| 2001 | $255,000 |
| 2002 | $210,050 |
| 2003 | $187,500 |
| 2004 | $98,000 |
| 2005 | $54,000 |
| 2006 | $35,050 |
| 2007 | $30,000 |
| 2008 | $65,000 |
| 2009 | $102,000 |
| 2010 | $84,500 |
| 2011 | $85,000 |
| 2012 | $102,000 |
| 2013 | $61,100 |
| 2014 | $65,000 |
| 2015 | $65,000 |
| 2016 | $63,000 |
| 2017 | $35,000 |
| 2018 | $25,000 |
| 2019 | $0 |
Equity From Principle Reduction
Assuming you got a loan to purchase your property and continued to make monthly loan payments, over time you would be paying down the loan balance and which would increase the equity in your property. One of the most common loan products is a 30 year mortgage with a 20% down payment. We’ve also included a table of the prevailing interest rate for each year, according to Freddie Mac.
So how is principle reduction calculated? Let’s assume we purchased a property in 1999 for the median sales price of $176,500 with a 30 year conventional loan with a 20% down payment. In 1999, the prevailing interest rate was 7.44%. We would have needed to put a 20% down payment and received a loan for $141,200. The monthly mortgage payment would have been $9,981. Now assuming we made the mortgage payments for the past 20 years, we would have reduced the loan balance by $58,296. This amount would be the equity from principle reduction.
Table #3 below, highlights the equity from principle reduction for each year since 1999.
| Year | Interest Rate | Principle Reduction |
| 1999 | 7.44% | $58,296 |
| 2000 | 8.05% | $54,035 |
| 2001 | 6.97% | $58,058 |
| 2002 | 6.54% | $66,832 |
| 2003 | 5.83% | $70,868 |
| 2004 | 5.84% | $85,272 |
| 2005 | 5.87% | $86,059 |
| 2006 | 6.41% | $75,866 |
| 2007 | 6.34% | $68,954 |
| 2008 | 6.03% | $58,383 |
| 2009 | 5.04% | $53,156 |
| 2010 | 4.69% | $51,223 |
| 2011 | 4.45% | $45,868 |
| 2012 | 3.66% | $41,887 |
| 2013 | 3.98% | $37,456 |
| 2014 | 4.17% | $29,408 |
| 2015 | 3.85% | $24,223 |
| 2016 | 3.65% | $18,493 |
| 2017 | 3.99% | $12,240 |
| 2018 | 4.54% | $5,574 |
| 2019 | 3.94% | $0 |
Total Equity from Appreciation and Principle Reduction
The combination of appreciation and principle reduction has favored buyers who bought 20 years ago. The ability for buyers to ride out the dips in the market has really paid off for them in the long run. As the saying goes, "Buy Low and Sell High," buyers who bought 20 years ago will do VERY well in today's seller's market, perhaps choosing to downsize into a smaller home with less maintenance. For those that have not bought yet, potential buyers can take advantage of today's low interest rates to build equity faster while holding out for future appreciation. With the development happening all around and additional jobs coming to the area, there is still a large potential for long term appreciation in Annapolis.
| Year | Appreciation | Principle Reduction | Total Equity |
| 1999 | $283,500 | $58,296 | $341,796 |
| 2000 | $270,100 | $54,035 | $324,135 |
| 2001 | $255,000 | $58,058 | $313,058 |
| 2002 | $210,050 | $66,832 | $276,882 |
| 2003 | $187,500 | $70,868 | $258,368 |
| 2004 | $98,000 | $85,272 | $183,272 |
| 2005 | $54,000 | $86,059 | $140,059 |
| 2006 | $35,050 | $75,866 | $110,916 |
| 2007 | $30,000 | $68,954 | $98,954 |
| 2008 | $65,000 | $58,383 | $123,383 |
| 2009 | $102,000 | $53,156 | $155,156 |
| 2010 | $84,500 | $51,223 | $135,723 |
| 2011 | $85,000 | $45,868 | $130,868 |
| 2012 | $102,000 | $41,887 | $143,887 |
| 2013 | $61,100 | $37,456 | $98,556 |
| 2014 | $65,000 | $29,408 | $94,408 |
| 2015 | $65,000 | $24,223 | $89,223 |
| 2016 | $63,000 | $18,493 | $81,493 |
| 2017 | $35,000 | $12,240 | $47,240 |
| 2018 | $25,000 | $5,574 | $30,574 |
| 2019 | $0 | $0 | $0 |
About Peggy Yee
Peggy Yee is a supervising broker at Frankly Realtors and is a local Top Producer. She has sold over $180 million in sales and was one of Northern Virginia Magazine's Top Realtors since 2015. She has been quoted in the Around Reston Magazine, Washington Post, Money Magazine, Consumer Reports, Zillow, Trulia and Realtor.com. Peggy is 100% committed to making your move the best experience possible! Don't just take our word...Click here to see what Peggy's past clients have to say about the experience working with her from Buyer and Seller Video Testimonials and you'll understand why she is one of the top real estate agents in Annapolis with dozens of 5 Star Zillow reviews. Click here for Zillow Reviews.
* Data Source: BrightMLS and SmartCharts. Information deemed reliable but not guaranteed.