October 10, 2016

How housing prices really change

Life Hacker -Contrary to popular belief, real estate barely outpaces inflation over time. On the other hand, it’s hard to make generalizations like this because some areas have seen huge returns in housing. Trulia looked at 100 metro areas to find the places with the highest and lowest home appreciation values.

They examined annual home prices from the past 30 years—between 1986 and 2016—using information from the Federal Housing Finance Agency’s House Price Index as well as their own calculations.

Unsurprisingly, they found that San Francisco has seen that highest increase in value. In 1986, the median home value in the San Francisco metro area was $160,955. Around that time, that amount was similar to values in Cambridge, Massachusetts and Fairfield County, Connecticut. But in 2016, the median home value in San Francisco is $1,058,474, which is a 557% change. That’s an average annual return of about 6.5 percent.

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