This Is A Regular Market?

We need the support of others – some we don’t even know – to encourage us to make a decision. In the real estate market when everyone is out there buying, we’re standing in line to pay the highest possible price for a house; offering the seller outrageous things such as vacations, cars and a sales price far exceeding their expectations.

We’re trying so hard to fit in, we’ve lost perspective. Some big mistakes have been made. We bought homes we could not afford, under the assumption that the market was going to continue to rise, with crazy loans. We used the equity in our homes to purchase non-essentials such as vacations, cars, boats, jet-skis, etc.

Now that the market has slowed, buyers are standing back waiting to purchase when we hit bottom. Well, the only way we’re going to know when we hit bottom is when we start climbing again.

In speaking with a 25-year real estate veteran, who has seen the market go up, down and back three times, he made an interesting point: This is a regular market. The market of ’02, ’03, ’04 and ’05 were anomolies. If you look at the statistics, you’ll see that he’s right.

2002 = 20.18% gain
2003 = 14.91% gain
2004 = 17.62% gain
2005 = 17.73% gain
That’s a total of 77.44% in 4 years.

The last time the market had anywhere near double digit increases for multiple years was 1975 through 1980. A six year run that totaled a 96.55% gain.

The biggest series of losses occurred within the 5 years: 1992 through 1996. That percentage totaled 12.61%.
The national average increase for yearly real estate values is 5-6%.
California’s average is 7.76% per year.
Over the past 38 years, the total percentage gain in California has been 295%.

Real estate ownership, just like stocks and IRAs, should be viewed as a long-term proposition – buy and hold.

One of my clients just told me the story of his parents home-ownership history. They purchased their home in 1952. They had to scrape together the $50 downpayment for their $12,000 house. That 3 bedroom 2 bath investment that they raised their family in, celebrated and cried in, just sold for over $800,000. His mom and dad had no idea – how could they – that later that investment would provide their children with financial comfort and their grandchildren with their college education.

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Vicki Moore About Vicki Moore

RE/MAX Star Properties
282 Redwood Shores Parkway
Redwood Shores, CA 94065

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  1. I have only been doing this for a year so this the best market i have ever seen. People are buying and people are selling and you have to do your best work to be the one who represents them.

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