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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 02-14-2008, 10:04 PM   #61
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We all know that luxury homes appreciate more than lower end homes, but I wonder if that isn't balanced by the huge sums that owners spend constantly redecorating.
I guess we all don't know that, because I didn't! Interesting! Here in New Orleans, luxury homes are feeling the housing slump a lot more than middle class homes. There is a longer backlog of luxury homes for sale, than there is for homes in general.

That could just be a local phenomenon due to wealthy people being able to get out (leaving their homes behind them, for sale), whereas often we middle class really can't.
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Old 02-15-2008, 12:47 PM   #62
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W2R what you describe is normal... luxury home owners tend to be the first to get in to "hot" areas leading to rapid appreciation in up markets, and they also tend to be the first out when things get really bad, leading to stagnation in severe downmarkets.

However in less dramatic downturns where the middle class is squeezed by wages or inflation or adjusting mortgages, the higher end homes that are paid for by cash may continue to appreciate while the lower end homes decline.
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Old 02-15-2008, 01:30 PM   #63
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honobob why are you so huffy? I can read and the answers you wrote all say "will be worth".. that's unknowable. I could pick any number and be right, or wrong, looking forward.

Prognostications here:
Home Value Calculator, Future Projected House Value - Move.com
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Old 02-15-2008, 01:37 PM   #64
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Actually if you took the $1,000,000 Hawaii property at 9%(my initial figure) back to 1958 it would sell for about $13,500. That figure seems reasonable. Now if you had a $200,000 property in KC at 4% then the sales price in 1958 would be about $3,000. That figure seems reasonable when you look at the 1950's prices below.

So yeah it looks like one area can appreciate at 9% a year at the same time another will only appreciate 4%. At least over 50 years!...

One of us is using funny math...$13,500 at 9% for 50 years is about $1,000,000. But $3,000 at 4% for 50 years is only about $21,000.

Look at it this way: $1,000,000/$200,000 = 5, and $13,500/$3000 = 4.5. So based on the example numbers your are using, both markets appreciated at almost the exact same rate over 50 years.

In fact, based on the starting numbers in 2008 ($1M home in 9% market and $200K home in 4% market), back in 1958, the home in Hawaii would be about $13,500, but the home in KC would have to have been around $30,000.
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Old 02-15-2008, 01:47 PM   #65
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We are in W Indiana, and the house we bought in 1997 is now worth what we bought it for. We live in a town of 80,000 for reference. There are pockets of areas in this country where investments in real estate did not appreciate 4%, in fact hardly at all. Small towns were left out in the housing bubble, and now with the "RECESSION" we are losing jobs from all sectors. The small towns are always the first to feel the sting of the hint of recession. We have been retired for 3 years, and now that we want to "get out of Dodge" we are stuck for a who knows how long. My husband was transferred nearly every 3 years, with his lifelong employer and this is the only time we are stuck except for the years in Houston, and then the company took most of the brunt of the move. Hey, why don't you all move up here and then my problems will be over and you should hit a good appreciating area (in your dreams).
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Old 02-15-2008, 02:26 PM   #66
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One of us is using funny math..


In fact, based on the starting numbers in 2008 ($1M home in 9% market and $200K home in 4% market), back in 1958, the home in Hawaii would be about $13,500, but the home in KC would have to have been around $30,000.
Oops.. that'd be me. I thought the decimal was a comma. But either way, If long term appreciation is 4% then yes that $200,000 home would have to be worth $30,000 in 1958 and I don't think that was the case so then the long term appreciation rate in Kansas City would have to be about 7.5% if it's worth $200,000 now and about $6,000 50 years ago.

My point is that long term appreciation rates vary by area and to automatically assume 4% is not correct.
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Old 02-15-2008, 02:34 PM   #67
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honobob why are you so huffy? I can read and the answers you wrote all say "will be worth".. that's unknowable. I could pick any number and be right, or wrong, looking forward.

Prognostications here:
Home Value Calculator, Future Projected House Value - Move.com

Sorry you want to read anything into my posts as "huffy" , maybe a little bit of frustration
But I do stand by my statement that my question was "What is your appreciation rate?" My specific examples were dated in the PAST. I talked about their movement in the FUTURE. AND if you bought a house in 1977 or 1987 at a certain appreciation rate it WILL be worth a certain amount in 2008!!

So as long as you assume you'll need 80% of your preretirement income and your house will only appreciate 4% and 4% is the only safe withdrawal rate and paying off the mortgage is the only way to go then "no worries" and no math.

so, what's your long term historical appreciation rate?

Your calculator shows SF rate over 5 years to be between 7.9% and 11.8%. It also shows my mothers old home in Greater Cincinnati as between 3.8% and 5.8%. I had hers over 40 years at 5.1%. Seems the more things change the more they stay the same.

4% my *ss
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Old 02-15-2008, 03:49 PM   #68
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This thread is interesting... I must admit I am surprised at how many examples have turned up of long term significantly greater than inflation appreciation rates.

Over say 100 years you can't have certain areas continue to grow at much greater rates than other areas. Just to run some numbers, lets start with some average home values from

CNN/Money: The hottest zip codes

For the purposes of this example I'll assume 3.5% inflation for the next 100 years.

A San Francisco, CA home now costs $1,300,000. At 11% compounded it will be worth 1.8 billion in today's dollars in 100 years.

A Huntsville, AL home now costs $194k. At 4% compounded it will be worth $319k in today's dollars in 100 years.

Basically any home that grows at 10% or more for 100 years will only be affordable to billionaires (today's dollars). When you start thinking about 200 years then you have to be at least a trillionaire (today's dollars) to afford any home that grows that much. Yes, the upper class is growing, and that is driving some home appreciation, but I personally can't imagine very many trillionaires living in 200 year old unremarkable 2,200 square foot homes.

Perhaps though we don't need to worry about such a long term since none of us is going to live that long. The home market is indeed very slow to react. And most importantly the average person only lives in a home for 7 or so years. So maybe over 7 or even 40 years those kind of appreciation rates can and will be sustained. I wouldn't bet on it, but this thread has helped me to see it's possible.
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Old 02-15-2008, 04:00 PM   #69
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This thread is interesting... I must admit I am surprised at how many examples have turned up of long term significantly greater than inflation appreciation rates.

I wouldn't bet on it, but this thread has helped me to see it's possible.

My work here is done. "Up! Up and away!"
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Old 02-15-2008, 04:23 PM   #70
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i've talked to people that bought in the late 1980's or 1990 and were upside down for a long time.
12 years for me (north of Boston)
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Old 02-16-2008, 12:43 AM   #71
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California is hurting:
Lansner on Real Estate » Blog Archive » Calif. home price off 18.7%, nation’s worst - OCRegister.com
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Old 02-16-2008, 01:15 AM   #72
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Riverside-San Bernardino, -18.24%
LA/OC, -15.43%
San Diego, -14.05%
Cape Coral-Fort Myers, Fla. -13.26%
Oakland, -13.07%
Phoenix, -12.97%
Las Vegas, -12.95%
Miami, -12.34%
Orlando, -12.16%
Tampa-St. Pete, -12.13%
hey, fort lauderdale finally didn't make it into the top ten worst. how cool is that! does that mean we've bottomed. they don't call this fort bottomdale for nothin' ya know.
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Old 02-16-2008, 01:36 AM   #73
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Or maybe California will bottom first with everyone else to follow
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Old 02-16-2008, 09:00 AM   #74
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Or maybe California will bottom first with everyone else to follow
It's quite plausible, but the impact will be significantly less. For example, a 30% decline of a $800K CA house is $240K. A similar house in Midwest is about $300K. A 30% drop is $90K. It's doubtful that the decline would be in the same magnitude as that of CA.
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It's STILL all good!
Old 06-03-2008, 12:30 PM   #75
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It's STILL all good!

S.F. immune so far from struggling economy
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Old 06-03-2008, 02:16 PM   #76
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The Silicon Valley effect?
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Old 06-03-2008, 02:38 PM   #77
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San Francisco has always been an exception to the rule... lots of folks who have independent wealth, so aren't whipsawed by economics as much as the rest of the country. It's actually a pretty good place to be FIREd, because there are a lot of other people with similar lifestyles to relate to. I walk past the restaurant mentioned in that article on my way to the gym. I've never eaten there because it's out of my price range, but it's always filled up.
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Old 06-03-2008, 04:00 PM   #78
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As I type this I am hearing (on CNBC, consider the source ) that the real estate market in Florida has recently been re-invaded by speculators snatching up those relatively cheap homes. So, the end of the housing slump there is predicted, though it is expected to take a while due to the present high inventory of homes.

Hmm.
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Old 06-04-2008, 08:36 AM   #79
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speculators snatching up those relatively cheap homes
The second mouse gets the cheese!

I wonder if the FL properties will cashflow (as a rental) at todays prices?
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Georgetown TEXAS
Old 09-22-2008, 05:24 PM   #80
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Georgetown TEXAS

REWahoo, you got some 'splaining to do!

Home appreciation for the last 18 years in Georgetown Texas averaging 10.9%

Last two years 11.01% per year and last quarter 10.36%

Annual appreciation since 1990
Austin 9.9%
Cedar Park 9.56%
Round Rock 9.16%
Longview 10.89%

YeeHaw!

4% Appreciation My *ss or the Texas version 4% Appreciation, BullSh*t!


Georgetown house prices and rental information - Neighborhood Scout
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