Historically, people have assumed that real estate is a safe place to put their money to help increase their wealth with minimal risk. After all, in the Seattle area, the last time we saw year over year price declines was back in 1981, when mortgage interest rates topped 18%. And even then, the price decline was minimal and the market quickly recovered.
When the real estate market in Seattle came crashing down the second half of 2007 and continued its downward spiral for the next four years, many people began to wonder about the reliability of real estate as a solid long-term investment.
If we look at how real estate has performed in the Seattle area (King County) since 2000 compared to the stock market, real estate has significantly outperformed the stock market even accounting for home value declines during the recession.
With Seattle area home values increasing 75.4% since 2000 and outperforming the stock market during the same period, real estate is still a good long-term investment even if the market adjusts from time to time. The Seattle real estate market is still strong, and while we may not continue to see large year over year home value appreciation like we saw over the last 18 months, we're definitely in the up trend of the traditional real estate cycle and should continue to see strong housing demand in the Seattle area as we move into the new year.
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Authored by David Monroe, Realtor®, Master Certified Negotiation Expert®
Phone: (206) 905-8590
Copyright (c) 2013 by The David Monroe Team at Keller Williams Western Realty.