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.

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