BiggerPockets

When Will Property Prices Start to Climb?

Sunday, April 11

Have you noticed the number of articles being written about when housing prices will start to recover and "real' appreciation will start to kick in?  It seems everywhere I turn someone is trying to "TALK" the housing market up.  Have you reading the same things? 

This link http://tinyurl.com/y2fdzy5 will take you to a Baltimore Sun housing blog that displays a map of the U.S. and predictions of when housing prices should return to their pre-decline days. 

After taking a quick look at these predictions... I am not sure I agree.  While I do believe we will be seeing measured, very measured appreciation starting in the next few years, in order for property prices to climb to their pervious highs is wishful thinking!

Why... to get to those highs would mean that the economy would have to produce over 8 million new jobs (just to reclaim all those who lost their jobs) and then it would have to grow so that incomes increase to the point where higher priced homes could be afforded.

Remember, one of the contirbuting factors to the downturn was that home prices had outstripped the ability of buyers to afford them.

Bottom line for investors... if you are counting on appreciation to make any part of your deal profitable... DON'T!  You will only learn some very hard lessons and it will cost you money! 

Comments

1. 

   Account Closed Reply
   almost 2 years ago

   Yes, I have read about "house princing" and that it will be starting up almost next week!
   So I agree with you: in the reality, it will take time and I think is about five years, because is not just about the price of the houses, is about othar issues of our economy that impact Real Estate business, too.
   You should share this comment with other realtors at www.flippingpad.com. They will appreciate it!
   Thank for sharing!
   Maria

2. 

   Peter Giardini Reply
   almost 2 years ago

   Maria,

   Thanx for the comment. You are so right with your insight that it is not just about property prices... but what is happening in the overall economy... and I don't see drastic improvements in the short term.

   Pete

3. 

   Mike Morrison Reply
   4 months ago

   Peter-

   I don't ever see property values at 2005 price point. The "experts" are just "talking up their book".I agree jobs are the key. Demographics are a factor. The population is not growing at the pace needed to take down supply.
   As an investor, I never factored in appreciation into my deals.

4. asda Reply
   4 months ago

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