John L. Scott Real Estate
Wednesday, December 12, 2018
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Architecture & Design
Developer & Architect Comments on Local Idaho Market & Design Trends (Boise/Meridian/Eagle/Nampa/Caldwell)
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Thursday, December 6, 2007

After the much hyped surge in real estate appreciation the last several years, there has become a renewed expectation for return on real estate investment. I find it similar to the hype surrounding internet stock in the late 90’s. With all the excitement and media frenzy, a sense was created that the internet was a great way to get rich quick. Unfortunately, the reality that investment is related to more than media hype eventually settled in.  The same holds true for our recent real estate market. We all saw unbelievable appreciation in our homes – and it was great! The reality, though, is real estate historically appreciates at an average rate of 6% a year. As a comparison, the stock market historically returns 10% a year on investment. Anyone strictly looking at a home as an investment is better off putting their money in the stock market.

That cynical view assumes that a house is just a commodity that we trade like stock - but it isn’t. A house is so much more than that. A house is a home. It’s our refuge from the world. It’s where our children grow up and where some of our best memories are made. The value to you of your home is a personal thing that is not easily reflected in an appraisal. There’s a reason why owning your own home is considered the American Dream. Some of us may be discouraged by the temporary softening of the market, while others are excited about getting into their dream home at an unbelievably great value. If you are looking to buy a home, I encourage you to not put off creating those great memories any longer. This is not to say go buy any house. Obviously sound long term investment is still important. Location and community amenities are still important decision factors. What I am saying, though, is that we have no control over this real estate market cycle, but we can take advantage of it. In the meantime, while the rest of us wait for the market to start cycling back up, we should focus on the positive and enjoy our home!

Posted by Joe Atalla at 12/6/2007 10:28:00 PM
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