I just posted a very good article on AustinMarketInfo.com:
- Home buyers are taking a longer term view of home ownership than in the past.
- “Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24% increase, while sellers who were in their homes for 11-15 years saw a median gain of 40%.”
- First-time buyers bought homes averaging 1,540 SF, and 93% of them took advantage of homebuyer tax incentive programs.
- In this 2010 NAR study, first-time homeowners accounted for 50% of all home sales up from 47% last year. (I have not been an advocate of the homebuyer tax credit programs, but they did motivate some buyers to accelerate their plans.)
- Repeat home buyers bought homes averaging 2,000 SF in size.
- For Sale By Owner transactions reached an all-time low in 2010 of 9% of homes sold (5% after factoring out various kinds of prearranged sales, and even less if rural sales are removed).
The first two bullets are most important in my opinion. If you review the history of real estate sales over many decades, property gained value over any ten-year period. I have pointed out to my clients that in the Austin area, even after the past two years of recession, homes have gained value over any five-year period. (See AustinMarketDashboard.com for extensive data and discussion.)
As the RISMedia article points out, “flipping” houses is almost nonexistent these days, but for property owners who stay put for at least 5 to 10 years, real estate remains a great investment. By all appearances, we are at or near the bottom of the current market cycle so it’s a great time to buy … but any time can be a great time to buy if it’s right for you and you are willing and able to take the long view.