The REAL Story...
Source: Coldwell Banker Residential Brokerage. Owned and Operated By NRT
Okay, so the word is out: It's not a great time for flipping houses. While just two years ago it made great TV and even better headlines as many homeowners realized significant earnings on the sale of their property, the market has certainly changed and people looking to make easy money in real estate may have to look harder, longer and closer at their choices. But for people who view real estate as the foundation for a long-range financial plan, there may be no time like the present to buy.
Just the Facts
While year to year fluctuations are normal, historically real estate has remained one of the best performing and consistent long-term investments. Real estate like all investments is cyclical in nature, markets go up and markets fall, but, if you look at real estate - especially in California - as a long-term investment, you should consider the following:
According to the National Association of Realtors, median existing U.S. home sale prices have increased on average 6.5% each year from 1972 through 2005 and 88.5% over the last 10 years.
Looking at the last 37 years of real estate in California, we have seen very few times in which real estate values have dropped. According to the California Association of Realtors, since 1970 the real estate market in California has only dropped seven times, six times under 3.7% and only once at 4.5%. In 1970 the median cost of a single-family home in California was $26,000. Today, 37 years later, California homes have seen a 2,165% increase as the median cost of a home is now $588,970.
The Bottom Line
The current housing market offers a unique window of opportunity for confident buyers. The exciting news is that for the first time in quite a while the stars are in alignment for consumers, mortgage rates remain low (certainly by historical standards) and there is a large selection of homes to choose from. There may be no time like the present to buy.
We are providing you with this information so that you can make an informed decision about the current market. In the last 15 years, we've seen very few opportunities in which buyers can prevail and now truly is the time. If you'd like to discuss your opportunities in relation to the current real estate market, please contact us today.