From 2000 to 2006, the average homeowner saw the value of his house jump by more than 50%. Many homeowners doubled, tripled and even quadrupled their wealth in just 5 years because of exploding real estate values. Indeed, plenty of experts will tell you what we’ve experienced over the last few years was just a ‘bubble’ that’s going to pop any minute now. Others insist that whether it was a boom or a bubble, it’s over. According to them, it’s now too late to get in on the party. Well, I’m here to tell you the homeownership dream is no fantasy. Homeowners have been getting rich off their real estate for years, and they will continue to do so in the future.
According to statistics compiled by the National Association of Realtors, U.S. real estate values have been going up steadily for 4 decades. Nationally, appreciation has averaged 6.3% a year since 1965. Marin County has averaged 8.3% a year in the same period. According to Freddie Mac, since 1950 U.S. house prices have never experienced a year-to-year decline nationally. Compare that to the S&P; 500 with no less than a dozen down years in the same period, or the market for U.S. Treasury bonds which has fallen in 17 of the last 55 years.
Of course, just because home prices have been rising for the last half-century doesn’t mean they’re going to continue doing so. Obviously, no investment goes up in a straight line forever. But real estate’s phenomenal track record is hard to beat, and most experts believe that homeownership is one of the best ways to invest your money over the long term. Remember, as long as you’re alive you have to live somewhere, and so does everyone else you know.