Home appreciation (foreclosures, investment, housing, condo)

[condorito]

I have been looking at some historical home appreciation data and came to the conclusion that the San Jose/San Francisco area is probably the best area in the country to own a house or condo as far as appreciation. Obviously homes in the area are extremely expensive but based on my research, a home that cost $100K in San Jose back in 1980, now it is going for $700K. I understand Seattle, Nassau County, NY and other places are also pretty good but is there a better place in this country to own a home than San Jose/San Francisco?

[arctichomesteader]

Be sure to include inflation in calculations to ensure accuracy.

[DanielChang]

Past performance is not necessarily indicative of future results.

[rcarrillo]

Originally Posted by jinxor

Past performance is not necessarily indicative of future results.

So funny.... and so true.

Don't forget, very few things go up forever. Eventually home prices need to keep pace with income. If prices grow much faster than income then no one can afford the homes and prices go down. Same as with rent, if renting is much cheaper than buying more people will decide to rent and not buy.

I think you need to take out a lot of what happened in the last few years. Prices became disconnected from income and rent because so many people were doing stated income teaser rate loans and thinking they could make a killing with appreciation in a few years.

Home prices will return to their historic trend of increasing (or decreasing) with the economic fortunes and income of the surrounding community.

[garth]

I was reading a recent report that documented the absorbtion rate in the bay area. The last 60 day absorbtion rate was listed at 53%. That means 53% of the listed houses sold, which is darn good.

Compare that with the 60 day absorbtion rate in one of the challenged markets. For example, Las Vegas' 60 day absorbtion rate was listed at 10% in the same report along with Reno, NV.

What's that mean for the future? I don't know. What I do know is that things can change so just because things are going well doesn't mean that it will continue forever.

There's lots of people who are contrarians. They don't jump like lemmings off the cliff with everyone else. Instead, they look for the blood in the water and see if there's some feeding opportunities.

So, is now the time to abandon the hot markets and look for opportunities where the blood is filling the water? Again, I don't know. I just wouldn't want to be caught in the exhuberance of an area like many people were caught over the last few years. Isn't that part of what happened that's led to our current situation?

[DanielChang]

garth, what was the source of the stats on absorption rate? That's pretty darn encouraging considering how hot the SF Bay Area got.

[garth]

It's right here in front of me. It's a February 2008 "Market Condition Report" from First Centennial Title. They crunched the numbers and then discussed the results in the report.

The report is primarily about the Nevada market. However, the discussion of the report took note of Bay area figures in an analysis of market conditions.

[DanielChang]

Originally Posted by garth

I was reading a recent report that documented the absorbtion rate in the bay area. The last 60 day absorbtion rate was listed at 53%. That means 53% of the listed houses sold, which is darn good.

Compare that with the 60 day absorbtion rate in one of the challenged markets. For example, Las Vegas' 60 day absorbtion rate was listed at 10% in the same report along with Reno, NV.

I'm a bit confused. Absorption rate is usually measured in months. That is, it is the number of homes on the market divided by the number of homes sold in a month. For instance, if there are 100 homes sold in a month and 2400 homes on the market, then the absorption rate is 24 months. In theory, this will tell how many months it would take to sell all the homes that are listed.

What exactly is the 53% referring to in your article?

[vincentnyc]

Originally Posted by condorito

I have been looking at some historical home appreciation data and came to the conclusion that the San Jose/San Francisco area is probably the best area in the country to own a house or condo as far as appreciation. Obviously homes in the area are extremely expensive but based on my research, a home that cost $100K in San Jose back in 1980, now it is going for $700K. I understand Seattle, Nassau County, NY and other places are also pretty good but is there a better place in this country to own a home than San Jose/San Francisco?

did u know cali is the #1 in foreclosures in the nation right now? those $700k homes will be slash in half by end of this year. just wait and see. buy it at the end of the year. u will thank me for it.

[HappyTexan]

We are in the middle of a housing bubble burst. Everyone under water now says that no one saw it coming. How can you predict what the future will hold ?

Real estate for investment is a gamble. Real estate purchase should be a long term investment. It's your home first..investment second.