Profile picture for Debbie Dear

BEST Return on Investment?

Is Real Estate the Best Return on Investment? Yes! Take a look at the chart and let me give you the facts.. Debbie Dear  [phone number deleted by Zillow moderator. Please see our Good Neighbor Policy]
  • May 02 2012 - Coeur d'Alene
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    Answers (18)

    Profile picture for wetdawgs
    thanks for sharing the graph.  Could you share the source?   For example, is the real estate US averages or for a specific community?  

    With numbers, it is really easy to have a selective presentation.   Interestingly, Nasdaq peaked in March 2000 so if someone bought a house that day in March they would be up relative to Nasdaq.  However, if one compares purchase at the peak of the housing bubble dates vs nasdaq (or other stock), the story could be very different.    Or, how about if one started in 1989.



    • May 02 2012
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    Profile picture for Ofe Polack
    Hi Debbie, love the chart could you provide the source, I want to share it with my investors, but will not do it without a source.  Many thanks!
    • May 02 2012
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    The chart was from a Case / Schiller article from MSN.com published late last year. I'm not sure of the specific parameters of the statistics (national or geographic area).

    Here's another Case / Schiller graph that puts a bit of perspective of where the majority of homeowners are now with their homes.



    • May 02 2012
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    Profile picture for the_country_hick
    If we go back just 5 years to 2007 how does real estate compare to just putting your money in the bank?

    Would I have more or less money if I put my money in a bank with zero risk of loss compared to if I put all of my money in real estate?

    Do not forget to include taxes, insurance, and average maintenance costs in your reply.
    • May 02 2012
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    Profile picture for SoCal Engr
    "There's lies, damned lies, and statistics."
    • May 02 2012
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    Profile picture for Debbie Dear
    Chart is from MSN Money.com-Case Shiller, national averages
    • May 03 2012
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    Profile picture for Debbie Dear
    Please keep in mind these numbers are from the worse decade in American real estate history. Real Estate is cyclical. In other words it goes up and down, the key to Real Estate investing is to buy low and sell high of course. In my opinion there has never been a better to time in American history to buy, prices are at pre-bubble prices and interest rates are so very attractive. When Real Estate and the country are in a state of depression that Buyers is the point of maximum OPPORTUNITY. When the country is in Euphoria and everything is peaches and cream that Investors is the point of maximum RISK in investment. This country will start climbing back to an optimistic state and then followed by Euphoria again. Now is the time to buy up the deals and hold on until the bubble rises again, it always does :)
    Choose a Realtor that has the "Heart of a Teacher", not the heart of a salesman. Debbie Dear.
    • May 03 2012
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    Profile picture for SteadyState
    My Dear Debbie -
    I would ask you to do your research before publishing misleading information. I will include a summary with sources that can be double checked for accuracy.
    "..the best data on house price suggests that after taking inflation into account, the answer [to how much a house appreciates] is slim to none. These data focuses on historical data from three nations.  Real house prices (TMW- in other words after inflation return) in the United States did not rise at all between 1890-1990…Thus, at most you will receive a 3 per cent real (1 per cent price increase plus 2 percent net ‘dividend') return on your home …"

    Lets at least be through in our research before making self-serving claims.
    • May 03 2012
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    Profile picture for the_country_hick
    Debbie, those numbers are actually from the fastest real estate appreciation ever. Just because prices fell after 2006 means nothing compared to the much faster and higher rise from 1998 to 2006 before things fell down.
    • May 03 2012
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    Profile picture for Debbie Dear

    Dan - the chart I posted starts with the year 2000 and it does show a decade where real estate fell dramatically.
    Steady State, I beg to differ and I guess that is why God made us all different especially in the way we think. I for instance have a rental property that I happened to buy in 2006 and have rented out ever since the purchase. My tenant's rent covers all expenses of the home and when I am ready to sell it in several years it will have appreciated and I will have very little out of pocket expenses if any. It will be profitable and a sound investment. Needless to say there are so many varibles that go into making an investment and every case is individual and unique. I love my job and I love making my clients happy with their investments and or purchase. I still stand by that this is an excellent time to buy Real Estate :).

    • May 03 2012
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    Profile picture for SteadyState
    Debbie -

    We are NOT talking about opinions. We are talking about facts that can be supported with data -even your example only shows a hypothetical gain. To make matters worse the hypothetical gains only occurs  if one buys a property where you bought at the price you bought and sold when you sold at the price you sell and they incur the same costs you do. This does not support your original post in a statistical meaningful way.

    I am not stating my personal belief - I am pointing to solid evidence over 100 years that says that RE investment in the US barely returns 1% after adjusting for inflation. Talk to a licensed financial adviser and ask him/her if that is a 1% return over inflation is GOOD investment and post the response you get on this board.

    This is what you: "Is Real Estate the Best Return on Investment? Yes!"

    I have given you evidence that is is false. Please prove me wrong.

    • May 03 2012
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    Profile picture for Debbie Dear
    • May 03 2012
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    Profile picture for Debbie Dear
    • May 03 2012
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    Profile picture for Debbie Dear
    • May 03 2012
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    The MSN article is two years old. It talks about how we're turning the corner and the market is going to go UP!

    Didn't happen.
    • May 03 2012
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    Profile picture for Debbie Dear
    SteadyState, you and I are not going to see eye to eye, as I mentioned every situation is different, every accountant crunches numbers a little differently, every property is unique, no ones investment in real estate will be the same as someone else's. I have invested money by purchasing real estate and I have invested money in the stock market. I personally like having a tangible investment such as real estate. Each situation is unique and we will never be able to compare apples to apples. I posted some great articles above if you would like to read them supporting that now is a good time to buy real estate.
    • May 03 2012
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    Profile picture for Debbie Dear
    Oops sorry that was a wrong link, here is the correct one, thanks!http://www.smartmoney.com/spend/real-estate/-1295050347411/
    • May 03 2012
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    Profile picture for the_country_hick
    I see it differently. Read the article below to see why.

    Correlation of Mortgage Rates With Real Housing Price

    When you had a bubble Do you know what the housing bubble really looks like? starting in the beginning of a decade that lasted for over half of a decade prices would increase dramatically. When the bubble pops prices would go much lower probably below the bubble starting point.

    The bubble has not popped completely yet (it has only partially deflated) due to government policies including exceptionally low interest rates.

    The tech bubble crashed quickly and that market recovered. For some reason the housing bubble is seen differently by those in power who are trying to stop the inevitable value rest that must and will happen.

    • May 04 2012
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