I believe to avoid the capital gains taxes(unless it is put into a more expensive house) , you have to live in the house for 2 years. Then no tax is paid unless over $250,000 in profit. I bought my house in 1995 for 100,000 (year it was built for me) and it is now valued at $200,000 plus. The majority of that increase is in the last 2 years. Houses where I live in Tucson (Rita Ranch) do not stay on the market for more that 2 weeks and sell above asking price.
Too bad I didn't buy the house next to me (identical) that went to the bank after the neighbor lost his job and then died of a heart attack. It set empty for a year for some reason and someone got into it and vandalized it. It went for $10,000 under market even though the bank had it repaired and is now worth $70,000 more then the two ladies who live there bought it for (about two years time).
Some houses in the Vail area that have been recently built (last 2 years) have gone up $100,000+ in the time they were built.