The REAL Real Estate Appreciation Rate

[honobob]

Free4now here ya go cut and pasted. Exactly as i earlier reported.
Since 1990

104.92%

5.83% 52Last 10 Years

68.86%

6.89% 63Last 5 Years

26.56%

5.31% 32Last 2 Years

11.26%

5.63% 36Last 12 Months

4.46%

4.46% 56Latest Quarter

1.27%

5.09%

 

[FUEGO]

Honobob, you are clearly cherrypicking the best neighborhoods and showing how great things would have been if you had only invested years ago (with leverage!!).

Not all of us have the luck or foresight or crystal balls to predict the future of neighborhoods with the accuracy that you seem to think we all should have.

As an example, the neighborhood I currently live in (and bought into 5 years ago) is a solid working class neighborhood and very "multiculural" (read: a victim of white flight). I used to live in this same neighborhood 25 years ago, and in talking with my parents last night, they were shocked to find out that home values were so low here. 25 years ago, this neighborhood was one of the top neighborhoods in the metro area, the kind of place that doctors and lawyers lived. If you bought into this neighborhood 25 years ago expecting outsized returns for buying into the hottest neighborhood, you would be sorely dissappointed today (well, you would have moved years ago because the character of the neighborhood is totally different than it was 25 yrs ago).

Since 1984, when the previous owners purchased my current house, the price has gone up just a hair under 3% a year. That is below inflation, by the way. That's the kind of returns you get for investing in the hottest area??

It is just like investing in the stock market in many ways. If you miss the huge run up in prices and get in after the money has been made, you are too late.

 

[ziggy29]

"Uh, we live in Texas" also means "we didn't participate in the bubble, so nothing is popping here."

 

[honobob]

Honobob, you are clearly cherrypicking the best neighborhoods and showing how great things would have been if you had only invested years ago (with leverage!!).

I’ve given the rate for the whole city and then the better NBHD’s. I think with google earth, and an hour talk with a good local realtor I could pick the better appreciating area in any American city and determine if it was coming or going. Pretty much anyone could do it if they looked at the real numbers and facts without distorting with their own preconceived notions.

You seemed to have missed this..

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%

But you didn't miss the boat! I invested in the 70's 80's 90's 00's and it's been all good. The point is, get in when you can! There's nothing magical about the past. Obviously if you didn't buy in 1990 you missed the annual 26.77% appreciation but don't let that stop you from the next 18 years of appreciation! Those are double digit appreciation rates that have nothing to do with leverage.

Not all of us have the luck or foresight or crystal balls to predict the future of neighborhoods with the accuracy that you seem to think we all should have.

I think with google earth, and an hour talk with a good local realtor I could pick the better appreciatine area in any American city and determine if it was coming or going. Pretty much anyone could do it if they looked at the real numbers and facts without distorting with their own preconceived notions.

As an example, the neighborhood I currently live in (and bought into 5 years ago) is a solid working class neighborhood and very "multiculural" (read: a victim of white flight). I used to live in this same neighborhood 25 years ago, and in talking with my parents last night, they were shocked to find out that home values were so low here. 25 years ago, this neighborhood was one of the top neighborhoods in the metro area, the kind of place that doctors and lawyers lived. If you bought into this neighborhood 25 years ago expecting outsized returns for buying into the hottest neighborhood, you would be sorely dissappointed today (well, you would have moved years ago because the character of the neighborhood is totally different than it was 25 yrs ago).

Again you’ve made my point and yet you bought there 5 years ago?

Since 1984, when the previous owners purchased my current house, the price has gone up just a hair under 3% a year. That is below inflation, by the way. That's the kind of returns you get for investing in the hottest area??

It is just like investing in the stock market in many ways. If you miss the huge run up in prices and get in after the money has been made, you are too late.

See above.

 

[REWahoo]

Honobob, with over 800 posts on this forum it seems a shame you haven't been able to master using quotations. Makes it very difficult for the two or three people who read your posts to follow along.

 

[honobob]

Honobob, with over 800 posts on this forum it seems a shame you haven't been able to master using quotations. Makes it very difficult for the two or three people who read your posts to follow along.

Actually I had under the old program but it's baffled me since we went "new and improved". If I'd known there were that many people reading I'd made more of an effort but presumed I was writing more for my own entertainment. I CAN do individual quotes but alas the multiple quote has been my cross to bear. A PM or public tutorial would be appreciated! Appreciated, get it?.

remember, I'm the guilty guy that didn't know Galt was gone.

On a side note, Are you associating higher post count with intelligence? I believe I have contrary proof.

 

[FUEGO]

Quote from Fuego: "As an example, the neighborhood I currently live in (and bought into 5 years ago) is a solid working class neighborhood and very "multiculural" (read: a victim of white flight). I used to live in this same neighborhood 25 years ago, and in talking with my parents last night, they were shocked to find out that home values were so low here. 25 years ago, this neighborhood was one of the top neighborhoods in the metro area, the kind of place that doctors and lawyers lived. If you bought into this neighborhood 25 years ago expecting outsized returns for buying into the hottest neighborhood, you would be sorely dissappointed today (well, you would have moved years ago because the character of the neighborhood is totally different than it was 25 yrs ago)."

Again you’ve made my point and yet you bought there 5 years ago?

I'm not sure what point I was making for you. I bought the house 5 years ago at auction way below "market" value just before the city spent $2 million on a lake revitalization project in my backyard. It is convenient for me for places that I shop, where I work, and family, and it has appreciated fairly well. But the appreciation is due to the fact that I bought it at a stupid cheap price and put a tiny bit of fixerupper in it. Otherwise I'd be sitting on 3-4% gains per year. It was formerly in the absolute worst base school area (the local elementary school was number 131 of 131). It got so bad that now we're getting some race-based busing going and pumping the rich white kids from the burbs in here, so next year it will probably be one of the top 10% of schools. I can't imagine that will harm my property value much.

In 10-20 years, I may see astronomical appreciation if my area gentrifies like other similarly situated neighborhoods have nearby over the last couple decades. Or I may see inflationary appreciation or less if the n'hood stays the same or gets worse.

In the meantime, my house provides a place for me and my family to live with a mortgage that is 1/10 of our gross income and only has 9.5 years left on the 10 year note. The house is a very small part of my financial plan and it doubling in value won't really affect my goals much, since I don't plan on selling it any time soon.

 

[REWahoo]

Using Quotes

 

[honobob]

Give a man a fish........

Honobob, you are clearly cherrypicking the best neighborhoods and showing how great things would have been if you had only invested years ago (with leverage!!).

Yikes!

It is just like investing in the stock market in many ways. If you miss the huge run up in prices and get in after the money has been made, you are too late.

We may have created a monster!

Thanks REWahoo! Now how do you quote multiple people?

 

[REWahoo]

Use the search button and you'll be amazed at what you might find...

 

[honobob]

Give a man a fish........

Use the search button and you'll be amazed at what you might find...

Using Quotes

I'm really not that much into fishing..........gotta a beer?

 

[REWahoo]

Nope...

 

[honobob]

Bait my hook?

 

[lhamo]

NYC has been around 10% over the last 25-30 years

what this means is that RE will double or triple in a 5-7 year period and then drop by 30% to 50% and then remain flat for a few more years. repeat.

i've talked to people that bought in the late 1980's or 1990 and were upside down for a long time. and i've seen people that bought at the bottom of the cycle and paid off their home in a few years.

There is also a huge disparity between different neighborhoods. We bought into a gentrifying neighborhood in Queens in July 2000, sold in May 2003. We paid 118.5k for our co-op, sold for 260k. We probably put about 10k + a lot of sweat equity into renovations, inlcluding all new windows, professional refinishing of the floors, and my husband redoing most of the walls (replastering and painting). The people who bought it from us sold it in September 2005 for 545k -- they did some additional remodeling including a new kitchen (old one was pretty much the original from 1918...). Our downstairs neighbors, whose apartment was the same layout as ours but really beautifully renovated (he was a contractor), sold September 2007 for 649k -- they had purchased for 125k in 1999, and done a total gut renovation. I think that was probably the peak of the bubble in that neighborhood. The first floor apartment (which was a mess and probably in need of a gut renovation) sold in Feb 2008 for 352k -- looks like it sold to one of the more prominent real estate agents in the neighborhood, who is probably going to try to flip it.

This neighborhood has had its ups and downs (was a major drug trade center in the 80s), but it has very good "bones" including lots of good, fairly large pre-war housing stock (landmark district), reasonable commute to midtown (main subway station newly renovated a couple of years ago), and a very vibrant, multi-ethnic population. People who bought in our building in the early 90s were upside down for awhile as values in the neighborhood dropped due to a glut of condo conversions. But they more than made out in this latest cycle. I can't see the values going back down to what they were even when we bought. If they drop the 30-50% from the peak, that is still much more than they cost for most the people who bought in during the upswing.

So if you can luck out and find a gentrifying neighborhood in a major metropolitan market, I think you can still do very well. Look for those key elements (good housing stock, good access to public transit, and general convenience of life) and I think you probably can't go wrong in a long-term investment. I am keeping my eye on the Seattle market (where my family is from and where we eventually might want to return to) in hopes that we might find something to buy while things are down.

lhamo

 

[honobob]

Texas has 5 cities in top 20 appreciating markets!

2009 Update! Corpus Christi 6% over the last 5 years and HOUSTON over 5% annual appreciation.

20 Metropolitan Statistical Areas and Divisions
with Highest Rates of House Price Appreciation
Percent Change in House Prices with MSA Rankings
Period Ended March 31, 2009
(Estimates use all-transactions HPI which includes purchase and refinance mortgages)
Note that purchase-only indexes, which omit appraisal values, are available for select metro areas at
http://www.fhfa.gov/Default.aspx?Page=87.
MSA
National
Ranking** 1-Yr. Qtr. 5-Yr.
Corpus Christi, TX 1 4.12 3.05 29.31
Houston-Sugar Land-Baytown, TX 2 3.83 0.91 26.36

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.

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

"Uh, we live in Texas" also means "we didn't participate in the bubble, so nothing is popping here."

Honobob, you are clearly cherrypicking the best neighborhoods and showing how great things would have been if you had only invested years ago (with leverage!!).

Did it?
According to neighborhoodscout.com Houston appreciated 5.83% per year since 1990, 6.89% over the last 10 years, 5.31% over the last 5 years, 5.63% over the last 2, 4.46% over the last 12 months and up to 5.09% over the last quarter!

So the mean is maybe mid 5%?

But Houston is a big diversified place. Honobob ALWAYS suggests buying in established NBHD's like Leeland/Bastrop. 72% of housing between $73,000 and $147,000. AND an annual appreciation rate of 23.47% each and every year over the last 18 years!!

 

[eridanus]

2009 Update! Corpus Christi 6% over the last 5 years and HOUSTON over 5% annual appreciation.

MSA
National
Ranking** 1-Yr. Qtr. 5-Yr.
Corpus Christi, TX 1 4.12 3.05 29.31
Houston-Sugar Land-Baytown, TX 2 3.83 0.91 26.36

And you'd still be down if you bought in 1986.

 

[REWahoo]

72% of housing between $73,000 and $147,000. AND an annual appreciation rate of 23.47% each and every year over the last 18 years!!

If you do the math with this appreciation rate, a $73,000 house would have been valued at $2,000 18 years ago (1991). Your $147,000 house would have been valued at $4,100.

I realize you are a west coast/HI dweller and aren't familiar with TX real estate prices, but I can assure you nothing that passes for a "house" could be purchased in 1991 for those prices. Not even in Texas.

Your numbers simply don't hold water.

 

[FUEGO]

If you do the math with this appreciation rate, a $73,000 house would have been valued at $2,000 18 years ago (1991). Your $147,000 house would have been valued at $4,100.

I realize you are a west coast/HI dweller and aren't familiar with TX real estate prices, but I can assure you nothing that passes for a "house" could be purchased in 1991 for those prices. Not even in Texas.

Your numbers simply don't hold water.

I see you are an administrator hence can't put honobob on your ignore list. Another sacrifice you have to make when you are in power I guess...

 

[honobob]

Your numbers simply don't hold water.

They're not my numbers. And the most recent numbers are from the federal government.

 

[REWahoo]

They're not my numbers. And the most recent numbers are from the federal government.

I couldn't get your link to work or find the data you quoted. Can you give us a specific location/page where the information is located on http://www.fhfa.gov?

 

[Rustic23]

If we are looking at appreciation of the Houston market, and I would imagine most of Texas, using 1990 as a starting point, then a healthy increase would not surprise. I began as a residential appraiser in 1987 in Houston. One of my first assignment was five townhouses near Sharpstown. (a subdivision in Houston).

I went to the books and got the values of the properties when built and last appraised. $87,000 each, for two bedroom, two bath units. When we were finished with the appraisals the units appraised at $15,000 each, and there were no buyers as you could not finance them. The last sales I saw on those units was $49,000 in 1997! There were other units, condos with inside hall ways that were built for $65,000 and appraised for $7,000 each!

 

[honobob]

I couldn't get your link to work or find the data you quoted. Can you give us a specific location/page where the information is located onhttp://www.fhfa.gov?

http://www.fhfa.gov/webfiles/2402/1q09hpi.pdf Check page 27.

 

[honobob]

Yeah, I thought actual property values would support the data. Thanks! Aren't you on the lake where they built the HGTV dream home? Your values have probably done much better than the average appreciations.

If we are looking at appreciation of the Houston market, and I would imagine most of Texas, using 1990 as a starting point, then a healthy increase would not surprise. I began as a residential appraiser in 1987 in Houston. One of my first assignment was five townhouses near Sharpstown. (a subdivision in Houston).

I went to the books and got the values of the properties when built and last appraised. $87,000 each, for two bedroom, two bath units. When we were finished with the appraisals the units appraised at $15,000 each, and there were no buyers as you could not finance them. The last sales I saw on those units was $49,000 in 1997! There were other units, condos with inside hall ways that were built for $65,000 and appraised for $7,000 each!

 

[Rustic23]

Just so it is not too misleading, we purchased a home in 1987 for $115,000. We sold it in 1993 for $115,000 and it was on the market for over a year! Condos and Townhouses were almost an exception when it came to very low prices, and as I stated, it had to do with finance more than anything.

We are now on Lake Livingston. I am pretty sure the HGTV dream home was not built in our sub-division. Our subdivision was developed in 1976 with about 2,000 lots. Since that date, about 65% of the lots are individually owned, and there are about 400 houses! To say the subdivision took a hit in the 80's is a understatement. The golf club has closed three times. The original developer, and at least three other developers have come and gone. There is currently no developer and the last group to buy lots in bulk are said to be turning them back to the bank. The last group was out of CA., they made a slick commercial and sold properties to CA residents looking for a cheap place to retire. They bought lots for $5,000 and priced them at $20,000+. Waterfront properties have increased in value since 2000. $55,000 to $185,000. More to do with, paraphrasing Will Rodgers 'Buy lake front property, God is not making any more of it!'. However interior lots can not be had for as little as $3,000. So if you try to use this part of Texas to substantiate value increases, it would be a poor choice.

 

[REWahoo]

http://www.fhfa.gov/webfiles/2402/1q09hpi.pdf Check page 27.

I see the Corpus Christi info on page 27 and the Houston-Sugar Land-Baytown info on page 33 but I see nothing regarding the Leeland/Bastrop data you mentioned. Where is it located?