As Replacement Housing reaches observable levels in a neighborhood, it begins to dramatically impact the average sale price of homes in the immediate area, raising values at a faster rate than in areas devoid of it. Higher ceiling prices affect this. Specifically, neighborhoods that attract larger, more expensive homes see considerably better than average appreciation. This is a quantifiable and statistically predicable pattern. Specific neighborhoods can be compared by their average current resale prices and their potential for future appreciation.

Replacement Housing occurs in a complex arena that includes consideration of numerous factors such as municipal regulations, tax burden, availability and quality of services, etc.. The market is discerning and accounts for these in the prices paid for sites. Locational preferences can be clearly seen in the premiums paid for sites in specific neighborhoods and cities themselves. These premiums are significant and can translate into $300,000+ in average appreciation between neighborhoods in just a few years.

All the neighborhoods that demonstrate above average appreciation gains show clearly identifiable Replacement Housing patterns. They also show earlier inception points and higher new-to-existing percentage ratios. When comparing neighborhoods, a few blocks one way or another can make significant differences in anticipated appreciation rates. Timing is also crucial as these price rises occur at a predictable stage of activity and tend to moderate as site costs conflict with maximum sales prices or ceilings as the pattern matures.

...Preferred locations, larger, higher-

priced homes and clustering patterns

significantly increase average home

sales prices faster in the more desir-

able neighborhoods.

Today with home equity serving as the bank for many households, appreciation and equity growth is an extremely important consideration in their financial affairs. Replacement Housing activities clearly promote equity growth and wealth accumulation allowing its neighborhood beneficiaries the ability to better deal with today's economic opportunities and challenges.