Friday, December 14, 2012
Home Price Rise in Perspective
In 2012 home prices in most major U.S. cities rose 10-12%.
But put this amount in perspective. If a home fell 50% in value over the last five years it would take a 100% price rise just to break even.
So a 10% price rise on this same home is one-tenth of the way back to zero.
Put another way, at this rate of double digit price rises an underwater homeowner will see daylight and break even in just about a decade. Or the year 2021.
Japanese investors talk about their Lost Decade.
American investors have their own nugget of conversation.