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House prices for chartistsHouse prices for chartists
Rickster said: "Charts of house prices for 20 cities. We are now back to 1992 levels (on average).
[url]http://biz.yahoo.com/seekingalpha/070604/37282_id.html[/url]
I need to have a talk with my county appraiser."
JAP said: "If those graphs represent actual median home prices decreases, they're incorrect.... at least for California.
I live in San Diego. When I moved here in 2001, the median price was 250-300K. In 2005 the median price had increased by about 115%. Right now, the median price is roughly $480-500K.
Same thing for LA county.... the median as dropped, but not as much as that chart suggests...
[URL="http://latimesblogs.latimes.com/laland/2007/06/la_asking_price_2.html?ref=patrick.net"]http://latimesblogs.latimes.com/laland/2007/06/la_asking_price_2.html?ref=patrick.net[/URL]
I would love to see homes drop back to the 1992 price range, I'd be able to pay for a home with 100% cash!"
marbles said: "[QUOTE=Rickster]Charts of house prices for 20 cities. We are now back to 1992 levels (on average). [/QUOTE]
My house in San Diego is worth double what it was in 1992, that chart is not accurate."
Rickster said: "A closer look revealed that the charts are of year over year appreciation, and not value (as I first thought). In most areas, they are showing that house prices aren't currently appreciating, and are even depreciating in some areas (like Detroit)."
Pb3190 said: "That is true to some extent in my area. Homes are not going up in value nearly as much as they were a few years ago."
thezster said: "[QUOTE=Rickster]A closer look revealed that the charts are of year over year appreciation, and not value (as I first thought). In most areas, they are showing that house prices aren't currently appreciating, and are even depreciating in some areas (like Detroit).[/QUOTE]
Thanks for taking that closer look..... cause it made no sense to me whatsoever - cause I've bought real estate in a lot of those markets over the past 5 years - and those homes values have done, and continue to do, well..... though the appreciation is, in fact, slowing considerably - or even dropping a bit..."
Slidingby said: "Yeah, that makes more sense."
FirefighterB said: "I'd love to see that be actual home prices that drop to or below 1992 levels, but that'll never happen. I do think, however, we're in for more dark before the light.
If you begin to trim the risky loans, then I can't understand how the hell the average person is going to afford a house in the future, especially in the areas that saw the most explosive growth.
If you figure, very roughly, that $30,000 in salary will get about $100,000 in home purchase power, even the average home price ($250,000) is going to require about $75,000. Perhaps the average two income family can afford this but, honestly, in many major metro areas, $250,000 isn't a valid median. You'd be LUCKY to get a decent 1-bedroom apartment here in NYC that's in a good neighborhood close to the train for that amount."
Aligator said: "Don't most home values flatten out after some years? They have in my experience.
Our two town homes are worth about twice what they were when we built them in 1985. But they are now paid for and generating 12,000/year after expenses..........I guess you could do all the math yourselve but we're keeping them.
Price an older (1970's )model ranch and I think you'll see that as an investment measured in the standard buy-it-cheap-and-sell-it-the-next-month method real estate just doesn't work.
Our own modest ranch is 18 years old. We have seen little appreciation since we bought it in 2002. But we don't care; it's paid for, too, and that is worth a LOT!
I did, however score a big one on a distressed property I bought in 2001.
Paid 9500...........did I mention it was DISTRESSED?
Worked in it for 6 months.....
Put 26,000 into it...
Then
I rented it for 5 years at 6000/year = 30,000
And
Sold it for 65,000
Total......35,500 into it (plus my own sweat)
And 95,000 out of it............over 5 years.
The proceeds, BTW, were used to pay off our primary residence. So it worked out OK."
AlfredSokol said: "Definitely sounds like some sweet success when you look at it! :th_dblthumb2:"
thezster said: "[QUOTE=Aligator]Don't most home values flatten out after some years? .[/QUOTE]
I don't think that's a safe general statement. In my experience, it boils down to location/condition/regional market. I've bought/sold a number of homes over the past few years - and have done well with them all. Most of them were of the older variety. The one that comes to mind first though is the one I'm in now.... 85years old - worth (sold for) under $200K 4 years ago... and is now appraised at more than double that.... location/location/location.... condition/regional market."
Aligator said: "[QUOTE=thezster]I don't think that's a safe general statement. In my experience, it boils down to location/condition/regional market. I've bought/sold a number of homes over the past few years - and have done well with them all. Most of them were of the older variety. The one that comes to mind first though is the one I'm in now.... 85years old - worth (sold for) under $200K 4 years ago... and is now appraised at more than double that.... location/location/location.... condition/regional market.[/QUOTE]
Congratulations. You've done well.
But have the previous owners of that same home done well?
85 year old money is worth 400K. So the question is: what was that money worth 85 years ago?
A little spreadsheet work shows that if property values appreciated 8% per year, then your house would have to have been built for 500$ in 1922 for it to be worth 400K now.
I haven't seen the house, but I'm betting it cost more than 500$ to build it.
And if it were built for 1000$?.................it has appreciated - on average - a little more than 7% per year.
Averages sometimes don't mean much, and I'm glad you are making money. But not everyone who has owned that home has done so well."