US Home prices...1890 to 2007

if it were a roller coaster.

http://www.speculativebubble.com/videos/real-estate-roller-coaster.php

 

My house has gone up considerably in the past 7 years, but when you compare interest rates - just under 6% to just under 9% when I bought it, it hasn't really gone up very much.......

Charlotte has not had happen what has happened in the bubble spots - California, AZ, Las Vegas, Florida, NYC......

Interesting index, though.

 

I've been looking at that too. Charlotte, while some areas are rediculously overpriced, seems to have stayed relatively cheap compared to other cities its size. Maybe when the bubble pops, it won't hurt the Charlotte market as much as San Diego where a 1100sqft ranch can go for 400k.

 

In Dilworth, 1100 sf goes for 400k.

In Myers Park, it'd be $700k and bulldozed........

But still - If you look at annual percentage increases over the past 20 years, it's not far off.

EG:

My folks bought a house in 1984 for about $160k. In 1994 it was worth about $350k, now it's worth about $850k. That's about a 6.5% - 7% annual increase. I think the national average before 1999 was 6.5%.

Inflation is a guage, but inflation doesn't take into account the desirability of a location - and that's all that matters, anyway.

Also - if the appreciation is, on average, 6.5%, and mortgage rates are historically well above that, how is buying a home a good investment?

 

Net out the tax deduction. Plus it's usually compared to crap like cars.

You're also assuming every home buyer has a large mortgage. My grandfather paid cash for his house, and cash for the materials to add additions. He had a higher rate of realized return.

 

Sure, but there's lack of liquidity and opportunity cost with that.

But - like previously, it's often called a good investment because it's compared directly to high ticket expenses.

As far as investments go, I've decided real estate can be OK if you pay cash and hold for about 10 years minimum, and it's not your residence. Otherwise, it's an expense.

 

Or if you plan to flip it. That has inarguably been a good source of income for a lot of people and has contributed to the rise. No?

 

It's a good investment if you don't lose your ass. Alot of people lose their ass.

Flipping, to me, seems as stupid as day trading.

 

HGTV and TLC are the main reason people think they can make $100k by flipping. Very few make that kind of money.

 

I've never watched those shows, but I noticed them scrolling through the menu. I thought 'housing bubble' when I saw them.