[ad_1]
“If only …”
Those are words spoken by investors who regret investment decisions they made in the past that didn’t turn out so well. Many real estate investors purchased properties at a peak in prices in 2007 thinking that the market would continue to go up, up and up. Some panicked and sold their properties during the tail end of the Great Recession in 2009 — often at a tremendous loss. As investors witness how the real estate market has more than rebounded in the past 13 years, they may say, If only …”
If someone invested in real estate at the pre-Great Recession peak in 2007 and held their investment until today, would they have gained or lost? They definitely would have gained.
The median sales price of a house sold in the United States in the first quarter of 2007 was $257,400. Because of the Great Recession, that price dropped to $208,400 in the first quarter of 2009. But after that, prices gradually rose so the loss was regained by the first quarter of 2013 at $258,400. The price then steadily increased through the second quarter of 2020 and then skyrocketed. In the second quarter of 2022, the median sales price was up to $440,300, representing an increase from 2007 of 71%!
Here is a chart that shows these declines and increases—
Image source: Federal Reserve Bank of St. Louise
Not only would investors profit from the appreciation of their properties from 2007 to the present, there was also an increase in rents during the same timeframe. The average annual rent for a single-family dwelling was $7,884 in 2007. That jumped to $13,968 in 2020, representing a 77% increase. It has risen much more since then.
So what is the lesson in all this? Hold your property for the long term. Don’t panic sell if the economy falters. If anything, buy more if you can afford it when prices dip. Then you will not need to say, “If only!”
Read next: Bezos-Backed Startup Lets You Become A Landlord With $100
[ad_2]
Image and article originally from www.benzinga.com. Read the original article here.