All Grown Up
Perhaps you’ve had one of those moments in life where you suddenly realize you’re a grown up. When a supped up hot rod goes flying past you on the freeway, and instead of admiring the paint job you catch yourself wondering who they have their car insurance through.
Another perfect example went viral on Facebook this week and talked about when you are watching the classic movie Home Alone and you catch yourself losing interest in the hilarity of the plot, and instead admiring the beauty of the home it was filmed in. Suddenly the thought crosses your mind, “I wonder how much their mortgage was.”
We did a little digging on that subject matter, and what we found was interesting.
The house which is located at 671 Lincoln Ave in Winnetka, Illinois is a stately 4 bedroom, 4 bath home that offers over 4200 square feet of living space. It was built in 1921 and sits on a half acre lot.
It sold on December 15, 1988 for a mere $875,000 – quite the bargain, even for the time. Sometime in the next year or so, they began filming that iconic movie that we all fell in love with.
The house just recently sold again in 2012 for $1,585,000. Based on that figure, as well as many other wide-ranging sources of data, the website Zillow currently estimates the home to be valued at $2,361,320, a 67% increase in just three years.
Comparing The Numbers
In order to answer our question about how much the mortgage on that home would have cost and how that translates into today’s dollars, it is perhaps easiest to do a side-by-side comparison:
|November 1988||March 2012||November 2015|
|Value of Home||$875,000||$1,585,000||$2,361,320|
|Rate for 30 Yr Fixed (Freddie Mac)||10.27%||3.95%||3.94%|
|Total cost of mortgage||$2,827,403||$2,707,709||$4,029,039|
This graph gives you an estimate of what the mortgage was 27 years ago when filming began on Home Alone. What is even more interesting is the fact that whoever purchased the home from that owner in March of 2012, actually got a better deal as far as the total amount paid on the house goes once the mortgage is paid in full. This is largely due to the incredible difference in interest rates between 1988 and 2012.
Even more interesting is the fact that the interest rates are actually even slightly lower today, yet because the home’s value has increased by almost 70% over the past three years alone, the total cost of the home would be nearly doubled when the final mortgage payment was mailed in.
(*It is important to note that the above figures are merely scenarios for comparison purposes, and assume that no money was put down at the initial sale of the home. While these figures are based on actual data that was found, we have no idea how much each of these buyers actually paid for a down payment, and therefore no idea what their actual monthly payments would be.)
Blast From The Past
Now that you are armed with this knowledge, take a look at some of the other prices from back in 1988:
Jennifer Leonhardi was born and raised on Catalina Island, giving her a unique small town perspective and focus on community. With a degree in Sociology, she now primarily enjoys writing, largely based on her own experiences, on topics such as financial assistance programs, issues concerning the home and family, and socioeconomic trends.