Every day the financial reports seem to be worse than the day before. At times it appears as if there is no good news to be found about our economy, housing and financial institutions. However, the housing market has some encouraging reports. Yes. Prices have dropped – but the charts below show the steady growth of housing appreciation and the value of real estate over the long term.
Chart 1: Return on Investment, by Steve Harney, Keeping Current Matters.
Source: Brookings Papers, 9/08.
Since 1980, nationally, the rate of appreciation for real estate has shown a steady increase in 5-year increments. The huge bubble from 2000 to 2006 was unsustainable and unrealistic.
Chart 2: % Appreciation, SteveHarney, Keeping Current Matters.
Source: S&P/Case-Shiller Report
The black line represents an investment made in each category in January, 2000 and what your return on that investment would be September, 2008.