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View Poll Results: What's your appreciation rate?
Uh, we live in Texas 26 20.00%
4% A $100,000 home will be worth $324,340 in 30 years 45 34.62%
5% A $100,000 home will be worth $432,194 in 30 years 10 7.69%
6% A $100,000 home will be worth $574,000 in 30 years 11 8.46%
7% A $100,000 home will be worth $761,226 in 30 years 1 0.77%
8% A $100,000 home will be worth $1,006,266 in 30 years 9 6.92%
9% A $100,000 home will be worth $1,326,768 in thirty years 3 2.31%
10% A $100,000 home will be worth $1,744,940 in 30 years 3 2.31%
11% A $100,000 home will be worth $2,289,230 in 30 years 1 0.77%
> than 11% and I'm not telling 10 7.69%
Voted "negative" appreciation. 15 11.54%
Multiple Choice Poll. Voters: 130. You may not vote on this poll

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Old 02-12-2008, 05:58 PM   #21
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No one could have looked at Houston home prices in the late 80s and predicted a negative rate of return over the next 20 years. It happened though.

Hawaii - With the increasing cost of fuel and the supply of cheap oil about to peak (see Shell email), I predict the ROR will be at inflation.

Vegas - Like Houston, it has a lot of open land. It also has water issues. It's toast - stick a fork in it. Negative ROR.
Doesn't anybody read the poll question? Appreciation RATE!! Not ROR, Not cash flow, etc.!!

Eridanus, when's the last time you were in Vegas? They are building up against the mountains.

Hawaii? Where will the locals live? How will oil prices affect their shelter decisions? Didn't we live out this whole oil shortage in the 70"s?
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Old 02-12-2008, 06:06 PM   #22
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Honobob, your poll says "... home will be worth...."

You only want to poll fortune tellers who can tell you forward appreciation rates, right?

Peak oil + global warming means that Alaska should have the highest appreciation going foward. The weather will be nicer. There's oil under all that snow. And they'll have an increasing supply of waterfront property too.

You can change your username to YukonBob.
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Old 02-12-2008, 06:14 PM   #23
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Honobob, your poll says "... home will be worth...."

You only want to poll fortune tellers who can tell you forward appreciation rates, right?
Hello!! Asking for historical appreciation rates. Oh wait, you knew that based on your first post. So Twaddle, share some numbers on your real estate investments. What has been the appreciation rate on the house you're in over the last 30 years?
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Old 02-12-2008, 06:20 PM   #24
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Sold family home after 43 years of continuous occupation: annualized IRR 12.8%. Not in the US.
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Old 02-12-2008, 06:24 PM   #25
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The house I live in didn't exist 30 years ago. In the 4 years I've owned it, it has doubled according to comps, so I guess that means 20%/year. Does that mean you want to buy it? I hope so, because nobody else is buying in my market right now.

Waterfront. 30 minutes from a major urban center. Am I a genius or what?

Remind me how smart I am next time I have to pay my property taxes.
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Old 02-12-2008, 06:38 PM   #26
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1977 to 1994, New Orleans East duplex, 6.02%. Then I ER'd and retired from the landlord stuff.

heh heh heh - as to the future north side of Kansas City - ? - not sure I care. Fairly competitive with rent - here two years so maintenance is a guess.
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Old 02-12-2008, 06:52 PM   #27
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Last 30 years = 5%(in my area). So I vote 5% for the next 30.
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Old 02-12-2008, 07:07 PM   #28
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Well it's not a vote of what you wish it would be. I'm looking for actual numbers. Your figure of 4% appreciation in San Francisco would mean those $700,000 1 bedroom condos were selling for $225,000 in 1978!! Don't think so. The state of California did not have a taxpayer revolt in 1978 voting in Prop 13 based on 4% annual appreciation!
The vote is about what it will be, not what it was. Indeed, I experienced about 9-10% compounded growth on my SF bay area condo that I owned for 9 years and recently sold. But if anything that historically rare rise makes me think the future will be worse not better when we revert back towards the mean. My prediction is that prices will move sideways, a little under inflation, for a while as we let out the hot air of the last decade.
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Old 02-12-2008, 07:23 PM   #29
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The vote is about what it will be, not what it was. Indeed, I experienced about 9-10% compounded growth on my SF bay area condo that I owned for 9 years and recently sold. But if anything that historically rare rise makes me think the future will be worse not better when we revert back towards the mean. My prediction is that prices will move sideways, a little under inflation, for a while as we let out the hot air of the last decade.
free4now
The poll question was "What's your appreciation rate?" not your anticipated, wished for, etc. The $100,000 figures were just to show the huge difference in compound rates over time for just an increase of 1 or 2 per cent. Sorry for the confusion. When was the last time you could buy anything for $100,000? So you'd have to agree that SF properties have beat the 4% over the last 30 years? When I moved from the midwest my choices were between SF and Hawaii. If I'd invested the same amount 30 years ago in SF I'd have a property worth $700K + vs. my Hawaii property worth $400K +. One reason I'll probably never sell CA.
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Old 02-12-2008, 07:57 PM   #30
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In general, appreciation of real-estate keeps pace with inflation except in a few insane areas, such as the SF Bay Area, Hawaii, and New York City because these people are loaded with $$$ or desperate to live these places.
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Old 02-12-2008, 08:04 PM   #31
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doesn't it all depend on which year you buy and sell even within each market. my inherited house would have gotten 7.5-8% at bubble peak, but now i'll be lucky to get 6 to 6.5% over 28 years. i've checked out about 10 or more similar properties in that area and the appreciate rates ranged anywhere from 3% to 35% in any two to 30 year period.

on my personal house i'm likely at an annual appreciation rate of 12% currently (over 14 years) and probably could have gotten 14-14.5% at bubble peak but this area was revitalized from crack town to gay central over those years and so i certainly would not expect even the lower percentage to continue into the near future. hard to judge though because this house is in central area of a built-out county.

who knows. as potable water becomes more dear, the value of existing houses might as well.
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Old 02-12-2008, 08:04 PM   #32
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My house waterfront florida has appreciated 11.5 % in the six and a half years I 've owned it . This takes into account the recent drop in real estate .During the good years the appreciation was over 20 % .
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Old 02-12-2008, 11:17 PM   #33
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Old 02-13-2008, 12:21 AM   #34
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I find it very exciting to gaze into my crystal ball of future real estate prices. To be sure, one can make a lot of money on buying and selling a house at the right time. Certainly, areas such as San Francisco and Hawaii have a better chance for appreciation. That said, I think we need to remind ourselves that we're now in the midst of the worst credit bubble in world history. I believe that prices will eventually fall in every region of the U.S. Just because they haven't fallen yet in your area is no guarantee that they won't. Many areas will not bottom out for at least two years. When they do, what will interest rates be then? Don't forget that the purchase of a home takes money. Sure, it could be cash coming from wealthy people, but many times it requires financing. With that said, who will be able to qualify for first mortgage when lenders are now tightening credit even for those with good credit. What will interest rates be two years from now? Loans in the five and a half percent range could be history by 2010. Also, we need to consider inflation getting out of control. Rates could increase significantly at that point. Again, sellers of homes need buyers with money or no sale takes place. No matter how great an area someone owns real estate in, if a potential buyer cannot obtain financing, a home will simply not sell. If these conditions should persist for any length of time, prices will become stagnant or go up very little. We've been in a credit/housing bubble for the past five or six years and price increases will eventually revert to the mean of around 4%.
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Old 02-13-2008, 01:26 AM   #35
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...Over thirty years the difference between an appreciation rate of 4% vs. 11% on a $100,000 property is $1,964,890. If you don't live in a higher appreciation area it would seem that purchasing in an area of higher appreciation would pay for alot of management fees and travel to a property in one of those areas....
Listen, I like real estate - I've owned multiple homes over the years and did pretty well (except during the early 90's). But I think it's not realistic to think that there are predictable 'higher appreciation areas'. Consider your 4% vs. 11% example. That's a differential of 7%, which would mean that the same $ investment in the 11% area would roughly double the value of the 4% area investment every 10 years. Over 50 years, that would be roughly a factor of 32!

So think about this - let's say you thought a certain area in Hawaii could predictably run 11% appreciation, and a certain area in Kansas City could predictably run 4% appreciation. Let's say you start with a home in Hawaii at $1,000,000, and a home in KC at $200,000, so the Hawaii home is 5 times the value of the KC home. In 50 years, you're saying the place in Hawaii would be worth 5*32=160 times the place in KC. That's exceeding difficult to believe.

It's even crazier if you work it backwards - the same assumptions would mean that, 50 years ago, the home in Hawaii was worth 5/32=.15 times the place in KC (otherwise it couldn't be worth 5 times the value now).

Of course, the recent run up in the market makes it easy for lots of folks to claim 10+% gains since the mid 90's, but if you think about the math, it's easy to see that you just can't assume that any market can sustain an appreciation significantly above national norms.
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Old 02-13-2008, 07:24 AM   #36
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the last 50 years we have had the boomers driving up demand for housing

as the boomers die we will need someone to replace them to keep the demand going at the same rate. does Gen X or Y or Z have enough people to keep demand growing?
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Old 02-13-2008, 07:47 AM   #37
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the last 50 years we have had the boomers driving up demand for housing

as the boomers die we will need someone to replace them to keep the demand going at the same rate. does Gen X or Y or Z have enough people to keep demand growing?
Look to immigration to fill the gap. The "boomers" are not the future for this country:

Pew Hispanic Center: Research and Surveys on the U.S. Hispanic Population

- Ron
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Old 02-13-2008, 09:00 AM   #38
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I think that I get the prize for lowest long term historic appreciation.

I've owned this house for 27 years and the market has about doubled - figure 3% compounded.

Small town in upper midwest. Lots of job losses in the first decade after we moved in, not a lot of growth since then.

My folks lived in Detroit from 1941-1973. They did okay over the whole period, but I expect it was prettly flat or even decreasing from 1965-1973. So I don't have the mindset that prices have to go up.
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Old 02-13-2008, 09:58 AM   #39
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I read an interesting statistic in today's San Diego Union. Nearly half of all homes that were sold in the county last month were sold at a loss. The median loss on these homes was 25%. The median home price in the county is now what it was four years ago. Again, I believe that San Diego was one of the first real estate markets experience a bubble and likewise is one of the first markets to go into free fall. Many regional markets if they haven't already, will follow in much the same manner.


SignOnSanDiego.com > News > Metro -- Distressed properties dominate market
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Old 02-13-2008, 10:29 AM   #40
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The Boston area has been appreciating at a 9% click for the last 20 years. BUT that's 0% appreciation from ~ 1985-1995 then 15-20%/year appreciation from 1995-2005. FWIW we've slipped back into negative territory the last 2 years.

Also depends what you bought and HOW you bought it. Did the best (~20%/year) on auction rehabs. If you paid full market price then over improved while carrying a negative cashflow (been there, done that too) you will NOT be happy with your "investment".
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