UnThreaded | Threaded | Whole Thread (35) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: synchronicity Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127777  
Subject: Re: Thread on Berkshire Hathaway Board Date: 8/19/2002 9:02 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
<< There have been enough times when the housing markets in the US have declined, sometimes dramatically, that a house is a fairly high risk investment. >>

Just curious if you could provide some source of information or link that supports this.


I don't know if one should think of a house as a "high risk" investment, but one can obtain a LOT of data on historical house prices in different areas here: http://www.freddiemac.com/finance/cmhpi/

Of special interest to me is the spreadsheet showing house price indices by MSA. Here's a direct link to the most recent one, if you want to download it (it's an excel workbook): http://www.freddiemac.com/finance/cmhpi/current/excel/msas.xls

To take one example that's been mentioned here, look at Houston in the 1980's. The Home price index (for all MSA's, 1st q of '87 is the baseline at 100.0) in Houston peaked at 129.27 in 2q of 1982, and bottomed at 92.55 in the 4th quarter of 1987. That's about a 28% drop overall, over a 5 year period.

Of course, this is just an index for an entire metro area. Certain neighborhoods within that city may fare far better or worse.

Anyway, the data is fascinating if you're interested in that sort of thing.

FWIW, the data goes back to 1975, and does seem to reflect a rule of thumb of long term housing prices increasing about 1% above the rate of inflation.

-synchronicity
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (35) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Value Hounds

Considerable Headwinds for Profire Energy?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement