Is ~5% annual property appreciation sustainable over the next 10-15 years?
- Thread starter alumnidawg
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Depends on a variety of factors. Property type, location, economy, quality/condition etc. And even then, a projection that far out would be little more than a guess.
Property values are artificially high due to Covid and the associated BS. They are falling now, at least where I keep up with the prices. I think they will drop for a while and then slowly climb but 5% is ambitious. But what do I know, I thought we would beat OM last night!
How many are gonna immigrate here and do they plan to live in a home?
I can only speak for what im familiar with and as far as farmland goes it’s never gone down in value. I’m sure the same can be said for most land in general. Lately there has been some stupid money invested in farmland. I’ve seen some auctions in Iowa farmland going for amounts that aren’t justifiable for getting a ROI. I just don’t get it.
Unfortunately, I get it. Number 1, Groups are buying row crop farmland at crazy prices because they know where it is headed. See the average Brazilian farm versus the average American one. It’s not profitable for you or me to farm…but big Ag isn’t you and me.
Number 2, and just as if not more important, inflation is not going to stop in the long term.
One could very legitimately and maybe correctly argue, number 2 caused number 1, or certainly added nitro to the process.
I think there’s tremendous value in farmland today. AI and Tech are going to totally revolutionize agriculture. I could see a world in the near future where the amount of humans involved in America’s crop production has drastically shrank, but the yields have exponentially increased.
In 20 years (hell, maybe in 5), I expect there to be a solar powered robot tending our fields. That bot will be taking soil samples, monitoring temperatures, scanning for pests in real time. It’ll know the best way to prevent damage when the evening temp stays above 83 degrees.
It’s going to be wild.
You might be in a lagging market. The national numbers went negative from late 22 through early 23. Case Shiller index just reported 5.4% yoy price increases for November.
Here's the composite 2024 predictions:
5% is tough to maintain, but there is a shortage of housing in a lot of areas and it's not going to get cheaper to build as cities, counties, states, and feds constantly add new regulations, permits and other criteria that drive costs to build upward.
Material costs and labor costs will continue to drive the price of new homes up.
In Rankin County existing home average per sf is around $178 on anything semi-updated. New builds are running $209-$225 average depending on location. There are some builders asking $250 to $265 sf which is ridiculous and more ridiculous is there are people who will pay thst to get new!
In Rankin County existing home average per sf is around $178 on anything semi-updated. New builds are running $209-$225 average depending on location. There are some builders asking $250 to $265 sf which is ridiculous and more ridiculous is there are people who will pay thst to get new!
Compared to what? USD? Any return is possible over 10-15 years. It just depends on the amount of additional monetary units introduced into the system.
Compared to bitcoin I expect real estate to get cheaper over the next 10-15 years. Today, a new house costs about 10 BTC in the United States. Let's check back in 10-15 years.
Compared to bitcoin I expect real estate to get cheaper over the next 10-15 years. Today, a new house costs about 10 BTC in the United States. Let's check back in 10-15 years.
Material costs and labor costs will continue to drive the price of new homes up.
In Rankin County existing home average per sf is around $178 on anything semi-updated. New builds are running $209-$225 average depending on location. There are some builders asking $250 to $265 sf which is ridiculous and more ridiculous is there are people who will pay more than that to get new.
In Rankin County existing home average per sf is around $178 on anything semi-updated. New builds are running $209-$225 average depending on location. There are some builders asking $250 to $265 sf which is ridiculous and more ridiculous is there are people who will pay more than that to get new.
Median Sales Price of Houses Sold for the United States
Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q2 2024 about sales, median, housing, and USA.
fred.stlouisfed.org
Looks like the historical curve is simply going up, up and away. There will be ups and downs but by and large, property goes up.
Intuitively, you would think generally property prices in an area wouldn't be able to outpace wage growth for an area over an extended period of time (with some exceptions for markets that are not typical, generally because of the amount of outside money coming in and/or lots of people with wealth not earned through their wages). But as long as people are having real wage growth excluding home costs, and they are willing to keep paying that extra money towards housing costs rather than improving their quality of life. Combined that with all the restrictions on building housing, and I think you can continue to see that kind of growth in reasonably desirable areas. We're basically on a trend where we keep getting richer, but restrictions on the supply side in housing and healthcare assures that we basically end up feeling similar because we just bid those up with our extra money.
Yep. And since the crowd does it, it's hard to go against it.
I don't want to wish my life away, but one good thing about my kids eventually growing up is that I will shed the need for a damn house, or at least a decent sized one. I HATE homeownership but damnit there's no other way. Can't realistically live in an RV.
I know several couples who live in a RV and most of them still work. I could do it, my wife couldn’t. All the remote working since Covid has been a boom to full timers. Most of them own a lot in an owner park or own land somewhere with a pad and hook ups. It’s a different lifestyle but they are all very happy with it.
Oh I agree, it would be awesome, but RVs do not go up in value.
I recognize not all houses do either, but they generally all keep their value.
Are you seeing foreign acquisition? I saw a headline about China buying up farm land. Did not vet the source...
It's going to be interesting. The lack of need for humans could make large swaths of the country just desolate. The only things that I can think of to prevent that are people too poor to move anywhere else and the possibility that rural internet attracts some people to that setting to work from home that otherwise would never have lived there.
Never once have I been inclined to price housing in bitcoin.
Bro......that's already happened, like 60 years ago. Why do you think the Delta is so poor now.
Good thing about AI/tech, is that that also creates jobs in that field.
I thought this would have already happened during COVID, but turns out, most folks like grocery stores and city amenities more than they like homesteading and small town life.
The big winners of the work-from-home movement are the outer ring suburbs of major population centers with jobs.
Sure. I was less asserting that it was a real possibility and more brainstorming what could prevent most of America from being unpopulated to the extent that it would be hard to have enough population in parts of middle America to support any industry beyond farming.
| United States | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| State or Region | 2020 Census | 2010 Census | 2000 Census | 1990 Census | 1980 Census | 1970 Census | 1960 Census | 1950 Census | 1940 Census | 1930 Census | 1920 Census | 1910 Census |
| Resident Population | 331,449,281 | 308,745,538 | 281,421,906 | 248,709,873 | 226,545,805 | 203,211,926 | 179,323,175 | 151,325,798 | 132,165,129 | 123,202,660 | 106,021,568 | 92,228,531 |
No not really. It’s mostly these investment groups that buy the land around here. A lot of what we rent is from an investment wing of the Teachers Credit Union.
Rural America is withering away. If you think it depressing in the delta, go out in rural Kansas and Nebraska. Those towns are all ghost towns.
One consideration nobody ever factors in is that while people die, so do houses. There were a lot of houses built extremely poorly in the late 50's to mid 70's. Many of which are in desirable areas. These houses are getting leveled and a new house is built in its place. Other well built houses are torn down for the same reason (location), because its an 1800 sf arts and crafts home in Highland Park and a plastic surgeon wants 5000 sf of west coast modern in its place. So in effect we are building a house but not gaining one for the national housing stock.
So the question becomes how quickly do these Boomers die vs how many houses "die." The old narrative was the Boomers would be moving into retirement/assisted living in the late 2020's and 2030's. After Covid, I think we'll have to drag them in kicking and screaming.
If you’re asking me, I think it's going to be a tough row to hoe with housing for another decade. So many houses in desirable areas are no longer houses... They are hotels. Gen X and millennials inherit many houses from their parents and sit on them instead of selling. ABNB has changed the game for a lot of areas.
Boomers will eventually croak en masse' but right now we have 2 octogenarians vying to run the free world from 2025 until 2029. If we can't keep the old farts out of the White House, I don't expect them to give up their personal homes anytime soon.
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I can name at least a dozen delta towns that are basically ghost towns compared to what they were 40 years ago. They were not super "rich" but they were very viable places to live, make a living and raise a family.
Compare any Delta city or town now to where they were in 1965. Hell, 1980.
Greenwood specifically, just because I used to go there in the 80s. I don't know if that was all due to farming modernization, or just some other industries leaving. I remember Viking helped out for while a little later on, but of course they sell out, as most MS companies do.
"One consideration nobody ever factors in is that while people die, so do houses. There were a lot of houses built extremely poorly in the late 50's to mid 70's."
Have you visited one of these "assembly line" type subdivisions (while under construction) we've been building the last twenty years ? I'll take the houses a 50 to 60 year old house thank you.
Have you visited one of these "assembly line" type subdivisions (while under construction) we've been building the last twenty years ? I'll take the houses a 50 to 60 year old house thank you.
And if anything, the population losses are accelerating. Lots of Delta towns in both Mississippi and Arkansas saw population decreases over 15% in just the latest census (2010-2020).
I guess somebody has to. I'll gladly take the leaps and bounds made on the quality of construction materials as a whole in the last 20-30 years.
I’ll do Clarksdale since my mother is from tbere and we went there all the time.
You had several different industries in town that provided jobs along with the farming community. Almost all of that is gone.
This is certainly a thing. In the older more established neighborhoods in Huntsville, it’s actually even worse. You have the Blossomwood area which is where a lot of old money OG’s from the area reside, but also a lot of young professionals (a lot of times without kids) have smaller 2000-2500ish sf homes on 0.3 - 0.4 acres. Adjacent old lots of the latter are being bought in pairs by the former, both houses destroyed, and a new single palace is then built in the place on the larger 0.75 - 1 acre that remains. Not sure how that’s even legal, but it’s happening here and probably elsewhere in the country.
In the case above, they aren’t even poorly built houses either. It’s a highly desirable area and there is market for them to even be used as rental or investment properties. But folks just want that juicy land.
Pine Bluff AR went from 49k residents in 2010 to 41k in 2020. That's just staggering.
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