"According to David Blitzer, chairman of Standard and Poor's index committee, current home prices are back to 2001 levels when adjusted for inflation." - Housingwire.com 1/3/12
http://www.housingviews.com/2011/12/31/home-prices-corrected-for-inflation-at-2001-levels/real-house-prices/
Upon reading this and suddenly believing I could go buy my neighbor's house for two thirds of its value - I thought it might be best to take a look and see some REAL (local - not Detroit or Las Vegas) numbers:
1. 1070 Grant Place, 80302 sold in June of 2000 for $355,000 and is currently listed for sale at $599,000.
2. 345 S. 38th St, 80305 sold in August of 2000 for $332,000 and is currently listed for sale at $414,975.
3. 2343 Kalmia, 80304 sold in December of 1999 for $485,000 and is currently listed for sale at $734,900
Now - these homes are located in different neighborhoods within the City of Boulder and have shown an average increase of 48.33% since the 12 month period ended August 2000. Inflation has averaged 2.48% over that time period according to inflationdata.com. Taking into account the inflation variable and assuming the sellers get 90% of their list price, we are still looking at increases greater than 30%. Also, remodels or additions could be a factor for larger increases in value. But since the Case-Schiller does not take that into account, neither will we.
I would like to thank David Blitzer for proving once again, that real estate investing comes down to three things: location, location and location. Forecasting and investing models can always be skewed and shown to be inaccurate. Always do your leg work and due diligence before investing.
Happy 2012!
No comments:
Post a Comment