Why I think Real Estate is Still A Great Investment – Long Term

The article below is written as a negative article, showing how Real estate prices in the US just recorded the greatest quarterly decline in past 21 years (at 2.1%), and a record year-over-year decline of 4.5%

 

My feeling is, that if I can make an investment where the biggest hit I will take, EVER, is 4.5% in a given year, I think you are still doing ok. Especially when you consider the upside – the highest quarterly increase in that same 21 years is 4.55% and the highest year over year increase in that period is 15.68%.

 

See the attached spreadsheet I created from the S&P/Case-Shiller® Home Price Indicex. Basically if you look at the US National home prices as an investment, you would lose money 22% of the time and make money 78% and the most you could ever lose is in a year is 4.5% and the most you could make is 15.7%.

 

Of course these are averages, and they are US, and they are National. So you could have made a bad investment and purchased a year ago in Tampa and made an 11% loss, but still, I thought this was interesting nonetheless.

 

Cheers, 

 

Dino

 

Fortune Article:

 

http://money.cnn.com/2007/11/26/real_estate/Case_Shiller_index_drops/index.htm?section=money_topstories

 

S&P Index site:

 

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,3,4,0,0,0,0,0.html

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