S.E.C. Real Estate Observer

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Average House Price in USA hits $3,000,000!

This headline is an actual quote from a New York Times article dated 4/1/2017.

The SEC Long Long Long Range Planning Committee back in 2002 was right. This august body projected that the average house and condo price in the USA would hit $3,000,000 to $5,000,000 in 15 years. There were very few believers then. Now that the market has topped $3,000,000, as projected, let’s go back and look at some excerpts from the minutes from that historic SEC meeting of 2002.

Skeptical Member: Do you have any facts to back up this aggressive statement?

Chair: Here is an actual history on some SFR’s to help make the point. They are all still increasing in value at an increasing rate.

Chair: It would be real easy to find 100 to 1,000 additional examples if you want them.

Skeptical Member: Give me something else.

Chair: Santa Barbara, California, with a population of 210,000, has the following situation: There are only 153 houses in the entire city that are under $1,000,000. The mean average is $649,000. The Director of the California Economic Forecast said there will be 5 to 7% appreciation in the city for at least the next six years. (Remember that’s compounding and will make the median average just under $1,000,000 in six years). His comment was, “There is a lot of desperation out there”.

Skeptical Member: Are you just hitting the exceptions to the rule?

Chair: These statistics are unending. A new 2400 sq. ft. home in Los Angeles averages $476,000 and in San Diego it is now $384,000. State wide, in California, the pent up demand has driven the re-sale median price of houses up to $285,860, which is an increase of 17% over last year. This is now starting to prove our projections. At this rate it will only take 8 years to reach a $1,000,000 average price and only 7 more years to top $3,000,000.

Skeptical Member: I think I am starting to see things your way but give me one more on a national level outside of California.

Chair: A new tract of houses being offered in Wailea, Maui in Hawaii has new houses for sale up to $18,000,000. Part of their audience comes from the neighboring Grand Wailea Hotel that has rooms renting for up to $10,000 per night.

The Now Positive Member: OK my blinders are off. What is the committee’s recommendation for action? What should I do in the next 15 years and where should I lead my clients?

Chair: Don’t forget your basics. You still need them. Things like Location, Location, Location are muy importante. But for the next 15 years the mantra for yourself and your clients should be Buy, Buy, Buy. Get serious. There has never in the history of real estate been a better time to buy than between 2002 and 2017. Whether your talents and/or appetite lead you to 10 houses or 100 or 1,000,000 plus apartment units now is the time to Buy.

Good Hunting.

Editors Note:

So, what do you think will be the average price of a house in your hometown 15 years from now?

The single family home is still the basic commodity of our business and the depository of vast amounts of wealth in our economy. It will always remain the single most valuable asset for the American family.

Drop me a note via e-mail with your opinion on this question. Its easy… just click here: corso1@mindspring.com.

We will publish your opinions in the next edition of the SEC Observer.

And while you’re at it, check out Bob Steele’s new web site: www.professionalhousebuyers.com.

Lots of timely information and estate building ideas from one of the SEC Masters…