Real Estate: King of Investments Forever
In our current temporary real estate downturn, afflicted by short sales and foreclosures, it is easy to conclude that real estate has ceased to be the #1 investment opportunity. Well, take off those dark glasses and consider the following:
• Over the last 30 years, the Chicago Home Price Index* has gone up 294 percent.
• The Chicago Home Price Index has increased 69% over the last 10 years.
• The highest appreciation in Chicago real estate over a three-year period was 52% in the three years ending with the 4th Quarter of 1978.
• The worst appreciation over a three-year period in Chicago real estate was -7% in the three years ending with the 2nd Quarter of 2009. Since then, prices have risen for 4 consecutive months.
Pretty hard to beat these long-term return on investment numbers! Especially when you consider a.) you get to live in your appreciating investment as an added bonus, or to rent it for additional income; b.) you are receiving appreciation on the entire value of the property even through you have typically not fully paid for it; c.) it is possible to create huge increases in value by "sweat equity" and wise improvements; and, finally d.) there are significant tax deductions related to property ownership. It's not likely that ANYTHING in America will ever replace real estate as the King of Investments.
*Federal Housing Finance Agency (FHFA) House Price Index
Posted at 10:30AM Nov 05, 2009 by Bob Billimack in Market News Comments[0]
