Real Estate Term
Appreciation
An increase in property value over time due to market conditions or improvements.
What is Appreciation?
Appreciation is the increase in a property's value over time, driven by factors like market demand, location, inflation, and improvements to the home. It is one of the main ways real estate builds wealth, because gains in value grow the owner's equity even as the mortgage is paid down. Appreciation is never guaranteed and varies by market and time period, so it should be viewed as a long-term trend rather than a certainty.
Frequently asked questions
Related terms
EquityThe difference between a property's market value and the amount owed on the mortgage.Fair Market ValueThe price a property would sell for in a competitive market with willing buyers and sellers.AssessmentThe value placed on a property by a municipality for tax purposes.Property TaxAn annual tax paid to the municipality based on the assessed value of the property.
Ready to put this into practice?
Start your property search or connect with a local Sutton agent who can guide you through every step.