Real Estate - A Great Long Term Investment

Larry O. Doss Wednesday, October 21, 2009

Real Estate - A Great Long Term Investment

GreatWest GMAC Real Estate professionals know real estate is a good long-term investment. Although home values have stalled or experienced decline in recent years, longer snapshots in time have proved real estate to be a fantastic investment.

Let’s consider one scenario provided by a real estate professional. If someone were fortunate enough to buy a home even in 2002 and paid $500,000. If they put 20% down, there mortgage was $400,000. That home went all the way up to $800,000 in 2005 and is now only worth $560,000. They likely refinanced when it was worth $800,000 and their note went to $600,000. They received a 200% return on their original investment, tax-free. Their original investment was not the price of the house but the amount of money they brought to the table. $100,000. Many folks used their home as an ATM machine with a roof. And many more homeowners are in trouble today because of it. Sadly, too many got caught in the free money craze.

The good news is that fortunately many of these homeowners are holding onto their homes and some day when we see a return to annual appreciation, they will see their property values rise once again.

Understanding that housing markets are cyclic is key. For homebuyers, our current cycle offers excellent home buying opportunities.

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Based on information from the Humboldt Association of REALTORS®, as of 09/29/2022. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be verified by broker or MLS for accuracy. All information should be independently reviewed and verified of accuracy. Properties may or may not be listed by the office/agent presenting the information. Copyright ©2022 Humboldt Association of Realtors®. All rights reserved.