The REAL Real Estate Appreciation Rate

[CuppaJoe]

S.F. immune so far from struggling economy

The Silicon Valley effect?

 

[free4now]

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.

 

[W2R]

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.

 

[tryan]

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?

 

[honobob]

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

 

[M Paquette]

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%
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Well, it's all location, location, location. Georgetown has the Inner Space Cavern AND Lake Georgetown, which is known to contain actual water. This causes the scorpion population to stick to the south side of the city near the cavern, making homes within the city much more desirable.

 

[deepc]

Unit 2008 Honolulu Tower downtown listed at 418k today.
We sold similar exposure unit within a couple floors of that one in mid 90's for 274k.

The unit had doubled in price in the two years before we sold, and then the Japanese bubble collapsed.

If I'm not mistaken that's just over 3 pct appreciation over the ensuing 14 years for one particular piece of Hawaii real estate, which is kind of my point in that it depends on what's selling, where it is, and what people want at the time. Predicting future performance on past results in the real estate market is a risky endeavor.

 

[honobob]

Unit 2008 Honolulu Tower downtown listed at 418k today.
Predicting future performance on past results in the real estate market is a risky endeavor.

I assume you're talking about this listing. $448,000/$418,000 not sure which is the correct price.
www.HawaiiInvestor.com

This property was built new in 1982. The first reported sale I can find is for $140,000 in 1988. I've got to say that was a high price for that neighborhood at that time. Mostly peep shows and pool halls in Chinatown and Downtown closed at 7:00pm. Nearest beach?

So it resold in 2004 for $260,000 appreciating about 4%. Still not a bad return for a $28,000 investment over 16 years. If the new owner gets close to asking he's got 12.2% annual appreciation over 4 years, not too shabby. Now if the original owner had kept the property and not sold in 2004 he would stand to realize $278,000 on his $28,000 investment at 6% annual appreciation. If you look at the start of this thread you'll see the difference between 4% and 6% appreciation over thirty years is almost double!

Not the 9-10% appreciation most people experienced in established areas of the island but pretty darn good for someone investing in an area that was very sketchy in 1988 and still is to some degree today and still the same far distance to any beach.

I can see where someone thought downtown might explode in the 80's but they should also be able to realize the gamble they took.

They could have went pretty much anywhere in Diamond Head or Waikiki and blown the doors off that deal.

 

[honobob]

Well, it's all location, location, location.

But look thru the real estate threads and you'll find plenty of people that think that only applies to CA or NY! Who was the guy complaining about no appreciation in Boston? Boston as a whole appreciated 149.48% or 8.3% average annual since 1990. But if you look at 3 specific neighborhoods in Boston you'll see that Route 30/Allston and Mass./Albany St appreciated 463.1% or 25.63% over the same time period. Columbus/Mass. St. appreciated 420.31% or 23.35% avg. annual. The figures I always show for my properties are compounded annualy.
And do the rich get richer? Consider the Bowdoin neighborhood that appreciated only 42.83% over the same 18 years coming in at 2.38% a year. So if you're out there shopping them forclosure bargains you might want to rethink your buy cheap and cash flow strategy. Doesn't seem to pay off in the long run!

Oh, 4% Appreciation Mah *ss!

 

[OAG]

I voted 4% (that was the lowest in your poll). However, I would have voted 1%, if that had been an option. It really does not matter to me as I am now on my sixth home and the first dollar I spent on one is in this one. I have never taken dollars out of a sale of a past home, other than sticking the proceeds some place before getting into the next home, and even if I were to sell this one and buy a new one, I am assuming the cost will be equal or more than the sale price of the last one. Frankly, "downsizing" IMHO does not work in homes - at least it has never worked for me in 6 transactions over 33 years.

Additionally, I have been around long enough to understand those list prices/sell prices can be greatly misleading. Hard to compare since you do not know if the builder or seller offered "off listing" incentives to the buyer, type of financing to include "buy down" of rates, redecorating allowances, relative to relative sales, etc., etc. I would guess that in the current sales environment incentives become larger and with increased frequency.

 

[honobob]

I voted 4% (that was the lowest in your poll). However, I would have voted 1%, if that had been an option.

OAG,
According to neighborhoodscout.com Dublin, Ohio has appreciated 101.4% since 1990 or 5.63% average per year. Appreciation of only 4.29% over the last 10 years so you obviously were not impacted by the so called "bubble". But appreciation of 3.49% over the last quarter! What's up with that? No bailout for you! Oops, that's an annualized rate based on a quarter of .87%! But still way higher than 1%.

Now if you'd gone for a better neighborhood like Lamb Corners/Amlin you'd have appreciation of 162% over the same period or 9% vs. 5.63%. Of course how hard would it be to pick the higher appreciating area. I don't know, maybe pick the area around that big Country Club golf course. See, pretty easy if you put your mind to it! So for the same $ invested you'd have an extra $60,660 or approximately 22% of the median home price. Hey you could put 20% down on another house appreciating 9% per year and have an extra $12K in your pocket!

Where did you get your 1%?

 

[OAG]

OAG,
According to neighborhoodscout.com Dublin, Ohio has appreciated 101.4% since 1990 or 5.63% average per year. Appreciation of only 4.29% over the last 10 years so you obviously were not impacted by the so called "bubble". But appreciation of 3.49% over the last quarter! What's up with that? No bailout for you!

Now if you'd gone for a better neighborhood like Lamb Corners/Amlin you'd have appreciation of 162% over the same period or 9% vs. 5.63%. Of course how hard would it be to pick the higher appreciating area. I don't know, maybe pick the area around that big Country Club golf course. See, pretty easy if you put your mind to it! So for the same $ invested you'd have an extra $60,660 or approximately 22% of the median home price. Hey you could put 20% down on another house appreciating 9% per year and have an extra $12K in your pocket!

Where did you get your 1%?

The 1% comes from me as I assume it to be net of costs to get in and the higher cost to get out, move costs etc., next place, etc, etc.

BTW I am on the Golf course (at least it is in this development), but I do not play golf.

I did not realize I had all this imputed income - Hope they do not appoint Al Gore to something where he can resurrect his "taxation of imputed income" for homeowners.

I will pass on the new home but hey, maybe they will set a favorable end date on the Mortgage Buyout program so that I can be the $1MM mortgage and sell it to the taxpayers.

 

[honobob]

The 1% comes from me as I assume it to be net of costs to get in and the higher cost to get out, move costs etc., next place, etc, etc.

BTW I am on the Golf course (at least it is in this development), but I do not play golf.

OAG Great for you that your appreciation rate is probably 9% annualy. But please do not confuse appreciation rates with ROE/ROR/IRR, etc. Identical houses close to each other will have basically the same appreciation rate but can have vastly different "returns" based on the particular financials for each property. And we are looking at AVERAGE numbers.

 

[OAG]

OAG Great for you that your appreciation rate is probably 9% annualy. But please do not confuse appreciation rates with ROE/ROR/IRR, etc. Identical houses close to each other will have basically the same appreciation rate but can have vastly different "returns" based on the particular financials for each property. And we are looking at AVERAGE numbers.

I think I understand that - I have an accounting degree someplace in the house. But I keep my life as simple as I can - pay cash (I think that is still a word) for cars, homes and some other stuff. To old to go into debt - but hanging around this board maybe us old folks really should just look for lots of "non-recourse" debt and just "live it up".

 

[honobob]

I think I understand that - I have an accounting degree someplace in the house. But I keep my life as simple as I can - pay cash (I think that is still a word) for cars, homes and some other stuff. To old to go into debt - but hanging around this board maybe us old folks really should just look for lots of "non-recourse" debt and just "live it up".

Well I wondering after I read this. Also of interest is that Dublin has more people living here who work in computers and math than 95% of the places in the US.

So for the non accountants what would you call your 1% figure?

 

[OAG]

A number I would be happy with? Plan to be here at least 6 years - so that, would more or less, pay the exit costs. Having moved from VA to FL to OH over the past 22 years we still plan one more cross-country move within the next 3-5 years.

 

[honobob]

A number I would be happy with?

Well, can't argue with that! I do think you'll be more than happy with your actual number 6 years from now unless your cross country move is to the west coast.

 

[al_bundy]

my wife looks at home prices in the NYC area sometimes. today she almost cried because she is saying asking prices dropped 30% - 40% since last year and earlier this year.

 

[honobob]

my wife looks at home prices in the NYC area sometimes. today she almost cried because she is saying asking prices dropped 30% - 40% since last year and earlier this year.

Why cry? You'd think that'd be good news as NOW you may be able to get in on a great deal! Don't cry over spilt milk. Neighborhoodscout.com shows Manhattan appreciating an average annual rate of 13.57% since 1990. 19.81% over the last 10 years and 4.25% over the last 12 months. Do you realize how much your leveraged dollar increases that!

Of course if you were lucky/smart to invest in Irving Place & 14th you'd be looking at annual appreciation of 26.77% over the last 18 years, even with all this crazy bubble bull!

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!

Today is a great day to buy real estate. I can think of $700,000,000,000 good reasons.

 

[honobob]

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.

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!!

 

[free4now]

The credit crisis is about as big of a red flag as you can get that the near future appreciation rate will likely be worse than the past decade or two.

 

[honobob]

The credit crisis is about as big of a red flag as you can get that the near future appreciation rate will likely be worse than the past decade or two.

Could very well be, but you have to remember "stuff" happened over the last 18 years and there was still major appreciation. So even if appreciation drops 50% some people will still be appreciating 13%+ a year. With leverage the return is fantastic!

Besides, didn't the government just solve this whole mess?

 

[al_bundy]

Why cry? You'd think that'd be good news as NOW you may be able to get in on a great deal! Don't cry over spilt milk. Neighborhoodscout.com shows Manhattan appreciating an average annual rate of 13.57% since 1990. 19.81% over the last 10 years and 4.25% over the last 12 months. Do you realize how much your leveraged dollar increases that!

Of course if you were lucky/smart to invest in Irving Place & 14th you'd be looking at annual appreciation of 26.77% over the last 18 years, even with all this crazy bubble bull!

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!

Today is a great day to buy real estate. I can think of $700,000,000,000 good reasons.

it was a good cry

bailout won't magically make profits for the financials, they are probably dead money for the next 5 years

 

[free4now]

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!

Funny how we look at things differently honobob. Just for kicks I went to neighborhoodscout.com, entered Houston, TX and right below the map of city center it said "Since 1990 Total appreciation -4.61% and Yearly appreciation -0.26%"

Now I'm sure you know of some neighborhood that did better so I'm not questioning your numbers, but you seem to rarely see the half empty part of this glass.

 

[honobob]

Funny how we look at things differently honobob. Just for kicks I went to neighborhoodscout.com, entered Houston, TX and right below the map of city center it said "Since 1990 Total appreciation -4.61% and Yearly appreciation -0.26%"

Now I'm sure you know of some neighborhood that did better so I'm not questioning your numbers, but you seem to rarely see the half empty part of this glass.

Free4now Tried to check myself but their servers down. Their site is tricky in that sometimes you need to back completely out to change cities. I post the web address so anyone can check. I could have gotten it wrong but I don't think so. I check the city generaly and then the best neighborhoods. I'm not saying their aren't NBHDs in most areas that do not appreciate. I specificly questioned the practice of investing in a cheaper part of town.