Historical Real Estate Appreciation  

Appreciation of real estate is quite important as based on it people decide whether they should buy a house or keep renting. Even a minute change in the appreciation has an impact on the long term value of purchase. For instance, if you buy a house for $235,000, and there is an appreciation of 3 percent after 30 years, then the value of the same house jumps to $649,000.

If you look at the historical real estate appreciation, you will see that on an average from the years 1963 to 2008, the price of a new home has been increasing by 5.4 percent each year. However, one should not take a new house's value to measure appreciation. One should be looking at existing houses to get a better indication of real estate appreciation.

First of all, the size of houses has been increasing steadily from 1950 to 2004. This increase in the size has been around 1.6 percent each year. So, if you look at the historical real estate appreciation, the increase is not due to inflation. Rather, the increase in the value of the houses is due to bigger sizes of the home. Once you take the size into consideration, the cost of a new home per square foot has increase 4.2 percent each year from the years 1963 to 2008. During the same period, the rate of inflation was around 4.4 percent. Hence, historical real estate appreciation has been more or less same as the general rate of inflation.

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Historical Real Estate Appreciation




Real Estate 101 :

How To Track Real Estate Appreciation ?      Real estate appreciation is nothing but an increase in the value of a house or property. When there is appreciation of the real estate, the owner has more equity against which to borrow from and he or she will have higher gains when they decide to sell the house. However, in order to benefit from appreciation of real estate, it is necessary to keep a track of it. This way you will be able to discern when you will get maximum profits. More..





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