The current price for the median US house is below $200,000 but a fair value estimate based on a mortgage rate of 4.5% is about $257,000 a 34% gain from the median price. There is still a lot of upside in real estate. Rates are inching up and this will create more value for homes as well.
Say mortgage rates rise, and it is conceivable to see this into 2014, to 6%, fair value for US houses would be about $219,000, still a solid investment of around $27,000 from today's price. We are still rising to where values were in 2009, so we are a good 40% below where we were for 2005.
Where are you, the investor going to invest your money? Treasury bills? How long can you live on zero percent interest, CDs? Come on aging folks, we all know you can't even beat inflation with half of 1% for a 5 year CD. There are few good alternatives for money. Real Estate at 6 to 8 percent is a great deal for an investor.
We still have a ways to go with the rise in real estate values, as we are just passing where we were in values from 2009. Look for 2013 to finish strong and for 2014 to build on the gains of 2013. Metals, Stocks, bonds, none look as appealing as real estate at the moment, and +Avondale along with +Riverside are on sale here in +Jacksonville.
#LizBobeck
No comments:
Post a Comment