“How Long Will it Take for Home Values to Come Back?”
I love reading about all the prognosticators telling us where values are going to be in the future, like they know. It is going to take as long as it takes, no matter what anyone’s opinion might be.
I have seen real estate values go up and down for many years. So let me share the following story, which will give you a look at what can happen.
In the mid 80’s I purchased a 68 unit apartment complex, all town house units and converted them to condominiums. Don’t get hung up on these prices. I paid $25,000 per unit, after renovations, started marketing them at $49,900, then $59,900 and finally $69,900. The entire process took 9 months.
In the late 80’s, values in our area dropped about 50% over an 18 month time period. There were a number of units that got foreclosed and I repurchased a half dozen units and rented them out. The average purchase price was $25,000 and started putting them on the market in the mid 90’s. The average sale price was $95,000.
Here is the point, values will continue to move, time cures all real estate values, no matter what all these fortunetellers think.
Home prices may not return to peak until 2023
(CNNMoney) — Home prices are showing signs of life, but have a long way to go to make up for losses from the housing bust.
U.S. home prices dropped by a third from the start of 2007 to the start of 2012, according to Fiserv, an analytics firm.
Fiserv forecasts prices will bounce back an average of 3.7% a year for the next five years — a rate that would still leave prices 20% below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.
It could take even longer in some areas. “In some hard-hit markets, prices could take decades to recover,” said Fiserv economist David Stiff.
Among those facing a long haul: Arizona, California, Florida and Nevada, the states most caught up in the speculative feeding frenzy of the mid-2000s.