Tuesday, November 13, 2007

Property price increase per year since 1890


Can you make money from investing in property?

The US Office of Federal Housing Enterprise Oversight reckons that, over a 30 year period:

The typical buyer of a $300,000 house will spend more than $1,000,000 on that house on
1. interest payments,
2. tax
3. and maintenance.
.
House prices?
Florida house prices crashed in the 1920s and did not recover until the late 1940s.

House prices in Dallas Texas crashed in 1986 and did not recover until 1998.

Robert Shiller is the Yale economist behind the S&P/Case-Shiller index which measures house price changes in the USA.

Shiller has studied US house prices between 1890 and the present day.

Shiller's data shows that US house prices rose rapidly in only two periods (A) 1945 - the early 1950s (B) 1998 - until fairly recently.

During the rest of the period(1890 - the present), the average price increase was 0.4% per year (with inflation taken into account)
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Sources include: http://www.time.com/time

Economics Blog : Home Prices Tumble, Case-Shiller Index Reports

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