Back to School: Real Estate History Lesson

Classroom History

What is history? Well, Webster’s starts with “a chronological record of significant events (as affecting a nation or institution) often including an explanation of their causes.” Not bad, right? Break it down to the simplest form and history boils down to one word: Facts.

Seriously, where's my hair?

Now, history provides perspective, which affects our decisions every day, every week. Facts. Apply it to anything — anything at all: Medicine, technology, the stock market, your hairline, real estate, whatever — and an interesting phenomenon happens: Trends are revealed and patterns identified. Facts. Real estate.

You have peas and carrots, thick and thin, real estate and facts. Ok, it’s a bit of a stretch though I’m getting to my point. Real estate has a long, outstanding, sometimes tumultuous relationship with history. And the facts – those obvious patterns and trends in real estate – help us make smart decisions today. Particularly when considering facts over many years. Try this:

• If you purchased gold in 1980 and held it until today, the value of the investment would’ve increased 118%.
• If you purchased a home in the U.S. in 1980, it would’ve increased in value by 207% (YES! Even despite the fact we’re down more than 25% nationally from our peak values.)

House of Gold

Good stuff. A few more:

• $72K = 1981 average sales price in Austin
• $255k = 2011 average sales price (you can’t live in gold, can you?)
• Austin population grew by 20.4% over the last decade
• Over the last 12 months, 10,000 new jobs have been created in Austin against 9,179 new dwellings built

That last one is a doozy. It’s an Austin number, not national. And all real estate, if you haven’t heard, is local. Based on building patterns over 30 years, it looks pretty clear we’re going to have a housing shortage unless building picks up dramatically. It’s evident in the rental market — occupancy at 97%, a rental rate increase twice what experts predicted. What does a shortage do to housing prices? Check the history!

Posted by John Crowe

John Crowe has published 9 posts.

John owns and operates Crowe Homes, and is a licensed broker and an associate with Keller Williams. John has focused on residential real estate for more than eight years, specializing in residential investment strategies. He owned and operated a local franchise for the largest homebuyer in the United States, buying and selling multiple properties on a monthly basis. He has been on both sides of the table and uses those skills to help his clients reach their real estate goals today -- whether they are a first-time home owner or move-up buyer, relocating to Austin or requiring assistance with a distressed sale. Prior to focusing on real estate, John spent more than 15 years in communications and marketing for technology companies and public affairs organizations. John earned a BA in government from Georgetown University in Washington, DC. Follow me on Facebook (www.facebook.com/crowe.homes) and Twitter (www.twitter.com/crowehomes)! www.crowehomes.com