Is ~5% annual property appreciation sustainable over the next 10-15 years?

[OG Goat Holder]

Pine Bluff AR went from 49k residents in 2010 to 41k in 2020. That's just staggering.

Well at least Arkansas has NW AR and a stable Little Rock metro to offset their losses. Here in the Sip, we have the hurricane-prone Coast and Jacktown baby.

 

[dorndawg]

Well at least Arkansas has NW AR and a stable Little Rock metro to offset their losses. Here in the Sip, we have the hurricane-prone Coast and Jacktown baby.

Definitely true, and I'd guess that way more of those pine bluff folks are staying within 10 miles or whatever, just out of the city limits. In Mississippi, nobody is moving from Cleveland to Shaw.

 

[NashLA]

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.

Don't forget the G'wood gubment purposely tanking the number one employer in the city - the hospital.

 

[57stratdawg]

Bro......that's already happened, like 60 years ago.

For sure. And in the 100 years before that. But, the amount of creative destruction we have coming down the pipe might look something like a century’s worth in a single decade or two.

 

[DesotoCountyDawg]

For sure. And in the 100 years before that. But, the amount of creative destruction we have coming down the pipe might look something like a century’s worth in a single decade or two.

We’ll see.

 

[PooPopsBaldHead]

"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.

I have. I was the structural framing specialist for the largest engineered wood company in the world for nearly a decade in Dallas. I have walked hundreds of production home jobsites. After leaving that field in 2015 I had a concrete/foundation remediation firm and walked through hundreds of homes built in the 50's to 70's with failing foundations. They had no concept of how stiff slabs needed to be on clay soil early on. Some of the first slabs were built in Dallas in the 50's during steel shortages during the Korean War. They used 17ing sticks in some slabs.

While many of the newer production homes are ugly and some corners are cut in terms of aesthetics (no trim, just rounded Sheetrock on every door or window) foundations, framing, plumbing, electrical, roofing, siding, moisture barriers, windows, and energy efficiency are considerably better in any jurisdiction following IRC codes. (I have seen some garbage construction in rural areas though.)

Plumbing in the 60's was galvanized steel in many homes. Low pitched roofs with tar and gravel roofs were a thing. Look up Stab Lok electric panels. Asbestos and lead were everywhere. And again. Those foundations... Low psi concrete was used and it absolutely crumbles over time. It's a very difficult conversation to tell a homeowner their foundation has failed so bad it can't be repaired. The house has to be leveled at that point. I actually had that conversation with and old timer that worked for Fox and Jacobs (one of if not the first and largest production builder in the US in the 60/70's.) He lived in a Fox and Jacobs home and told me that when the 30 year mortgage gained traction in the early 70's the Fox and Jacobs team designed and builts homes that would last 30 years. His was almost 50 and he said the management team in the 70's would have been proud it made it that long... Dàmn that is crazy to think about.

Fox and Jacobs Article from 1978

 

[Mr. Cook]

Interested to hear what everyone thinks.

Doing quick back of the envelope math, that would amount to about about a 60-65% increase in valuation over 10 years. Maybe some of the responses on here prove that add (for those that provided the data)

Given the nature of factors involved, it depends and could be high variability. If I'm in rural Mississippi, I'd say "no." In Coastal Mississippi, "possibly"

Lastly, what is the desired outcome for the valuation? To me, a house and land are but a portion of the strategy to wealth / estate management.