That is the title of an article written by Steve Meade, President of my company, Ken Meade Realty Inc. in Sun City AZ.

I felt the article was good enough to publish here in its entirety, with permission from Steve.

Wouldn't it be wonderful if more of the items we bought increased in value while we owned and used them?  In this environment, we could buy a boat for $20,000 and sell it five years later for $24,000.  We might buy a motor home for $120,000 and sell it in a few years for $125,000 or $130,000.  If you wanted a $30,000 car, you would buy it knowing that if you kept it in good condition, you could resell it for more than you paid.  If purchases like television sets, pianos and furniture all increased or kept their value, our fantasy world would become even more enjoyable. 

Unfortunately, very few of the things we buy go up in value.  Many, like clothing, books, baseball gloves and small appliances lose most of the value we paid for them almost immediately.  They may still be worth the purchase price to the owner, but any attempt to resell them is going to bring a small fraction of their original selling price.  Even big ticket items suffer an immediate devaluation.  We all know that a new car loses thousands of dollars of resale value as it is driven off the lot.  The same is true for motor homes and boats. 

There aren't many items that actually increase in resale value.  Some collectables, like fine art or rare automobiles, may qualify, but the owner generally needs to be either very lucky or very knowledgeable when making both the purchase and the sale.  Stocks and mutual funds also often do well over the long run. 

If we look for items that we can use daily and still watch the value increase, we eliminate almost everything except real estate.  The wonderful thing about real estate is that, historically, it could be purchased, heavily used and normally resold later at a similar or better price.  This has been true of personal residences, rental homes, farm land, orchards, vacant land, office buildings, retail centers and industrial buildings.  Of course, some knowledge is required when buying and selling personal and investment real estate, but with the help of a knowledgeable REALTOR®, most property owners have done well over the long run.

Everyone expects the value of cars, boats, motor homes, television sets and furniture to decline.  We expect it and don't even think twice about it when it happens.  If homes historically went down in value, everyone would expect it to occur with real estate also.  If declines in real estate values were normal, we would not see headlines and media stories tracking home prices, just as we don't see headlines telling us that cars lose value.  Even if values traditionally went down, people would still buy and lease real estate, just as they do cars, because homes are necessities.

Real estate is unusual in that it normally holds its value or increases in value.  Even though recent speculation and easy, unrealistic financing options have dealt real estate a set back, history tells us that we will return to normal in the long run.  And, that is good news.

It makes you think, doesn't it?

Jim Little, your Sun City REALTOR®

Please visit my Web Site, suncityneighborhood.com where you can search the MLS with no registration for free.