How Much Appreciation Will I Get 5 Years From Now?

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I recently had one of my buying clients ask me, “How much appreciation will I get 5 years from now?” What I told him at the time was, I honestly didn’t know. So I decided to look up some information and came across an interesting piece of information.

The Home Price Expectation Survey, recently completed in July came up with an interesting number of 10%

According to this survey, much like the Case-Schiller Future Home Price Index predicts, home values are going to continue going down. As you can see from the graph, from “TODAY” you see the price indicator drop until about the middle of 2011 and then start going up. By 2013, values will be back to where they are today.

So while it’s going to take the market three years to get back to today’s values (which for sellers isn’t great compared to 2005), you can see that a modest, but respectable, appreciative value of more than 3% annually should be realized by homeowners.

So to answer the question specifically I’ll use an example. If you buy a home today at $350,000, in about five years, the home will be worth about $385,000.

I don’t know about you, but I’ll take that over the ups and downs of the stock market any day. And plus, you get a home to live in for 5 years! You can’t live in a stock.

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