Would you rather be Appreciated or Depreciated?

Here are some interesting numbers for you to contemplate if you own a home or are considering owning a home. These come to me from a subscription to Trends, compiled by Mr. Don Pickett. He describes the numbers as ballpark however they ring pretty true by my reckoning.

First off let me say that the ownership of real property as an investment has traditionally been built around the principle of equity. You establish equity in two ways. 1) You pay down your mortgage. 2) You hope that your property increases in value over time or appreciates.

Following are numbers reflecting the principle of appreciation over the last 10 years. You will note that the numbers will reflect a % of the year increase in value over the previous year and the average price of a typical home in Leon County in that year.

YEAR............... % CHANGE...................... AVERAGE PRICE

1999...................... 3%
2000...................... 6
2001.......................8........................... $153,664
2002...................... 4............................. 159,481
2003.................... 14............................. 181,191
2004.................... 12 .............................202,835
2005.................... 15 .............................233,826
2006...................... 8 .............................253,546
2007...................... 2............................. 257,874
2008.................... (6)............................ 242,603
2009 (thru Sep) (10.5)......................... 217,214

Once again, we see the application of the law of gravity. What goes up must surely come down. Look at the average price for a home in Leon County 2001 vs 2006. What you bought '01 was worth approximately $100k more 5 years down the road in 2006. What a run.

It has now changed. In my opinion it has changed forever.

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