Dim sum bet?
Ok!!! But which house are we talking about? 
I need to keep fit and stay healthy. So many free dim sum coming! 
10% per year for the next 20 year? Why donāt you sell your houses to buy sp500 at 10x margin? You would have 80x return in 20 years. If you happen to have 12M today, you can become a billionaire in 20 years without lifting your finger
You need a calculator.
1 Like
You need 12M to become a billionaire. But itās easy, just buy and go on a 20 year vacation
I think this 2.4M House will be worth 3.2M in 2028. Would you sell, hold or even buy?
Thatās 166% return on 20% down. Probably still beats stocks in 10 years.
If you want to beat stocks forever, need to keep cash out and buy rentals every 5 years. Itās doable.
In 2010, would you have believed that this house would be 2.4M in 8 years? Someone here said that growth in house prices in the last 8 years was special. This house shows that itās been happening in the bay area for the last 50 years. Yes, there certainly were dips in between.
This is the standard price range in that area. This house is not special.
Last 8 years was special because housing fell hard from 2007-11. Rise from the bottom of the trough is always the steepest.
On average this house doubled every 8 years for 48 years. I am positive in 2010 it was at least $1M. So it went up 2.4 times to make up for the recession. I donāt know if you can call that steepest. It has seen some crazy events like:
1987 stock market crash of 20% in a single day
Massive earthquake (scary for real estate)
Iraq war
Dot com bust and 9/11
Great Recession of 2009
Still managed to double every 8 years.
Iām not talking about this house, but the whole housing market as a whole.
He needs to revise his high school calculus.
Are you talking about Amapola drive home? Yes, it may be 1M 2010, but it is the same price since 2006/7 period. Between 2007 and 2011 the prices stayed same or 5%-7% drop in that location.
The bay area appreciation, in such places, may range 5%-7%, rarely 8%. It is common to see home value doubles in 10 years.
Still my friends (previous neighbors), first time buyers of that area around 70k-140k range, living there retired. Those days, the 70k-140k range is too big a money as their income was very low.
If the Amapola home doubled once in 10 years then it would have been worth just around $1.2M, not the $2.4M it sold for couple of weeks ago. It did appreciate almost at 9%. How much it went up during every 5-year period really does not matter when you look at what happened over the last 48 years.
The appreciation is not constantly even. The curve is choppy.
Yes, itās choppy. But unlike the stock market you can hold on to it long term because either you are saving on rent, or itās generating rent.
San jose has rent control, no? 
Not for these homes. Only commercial apartment complexes and may be condos.
But your calculation makes the assumption that they were living in a similar house they would be saving on 3.5-4k rent if they were renting the same house.
Rent a rent controlled apartment, then all calculations are off. My rent was 1500$ for 1br in mtv. Utilities for a house that size would cost a lot. You wouldnt pay 3500 rent, but their previous rent included utilities. Then there is up keep.
Now the yard maintenance will cost around 100$ for gardener, water will run over 150$, electricity will increase but not by much, trash will cost another 100$ etc
Lets see if they just bought the peak or not. I am thinking the same on my side.
Not really. The current rent on that home would be $5K. Thatās why I took $3K as the rent ( reasonable for any SFH in the bay area).