Real Estate Price Appreciation / Depreciation by each State
The real estate market in 2013 is showing signs of a good year for homeowners. Home prices seem to have stabilized and some experts are predicting some nice growth in home values in most markets around the country.
While the future looks decent, some still find it difficult to get the taste out of the real estate bust of the last decade. Foreclosures and short sales are still very present in our minds. As such, it’s important to look at real estate similar to how we probably should look at all types of investing decisions: it’s all about the big picture and the long term plan.
As the below infographic from 29doors shows, the 3-year and 5-year growth rates of home values in many parts of the country are ugly. But, if you scroll down and have a look at the 10-year growth rates around the country, it looks a lot better.
While the last decade saw a massive bubble followed by its inevitable burtsting, the reality is that the long term picture of real estate remains intact. Even terrible markets like Florida are showing positive growth rates when looking at a ten-year horizon.
What does this mean for the average homeowner? It’s best to ignore short term market fluctuations. Massive increases or decreases in a single year are likely to even out over time. Viewing your home as both an expense and an investment is also a good way to ensure you won’t overextend yourself on a regular cash flow basis. Lastly, don’t view real estate as “quick money.” Betting on short term returns is difficult and can go either way. Rather, find a place you want to live for the long haul and your lifestyle and financial picture should be in good shape.