In the short term, real estate might not be the best investment of your hard earned money. The reason being is that there might be other investment instruments that will yield a greater return for every dollar spent during the short term.
Such was the huge increase in the value of an ounce of gold during “The Great Recession of 2008” as well as any other time in the history of the United States of America when there was an economic recession or an economic depression. Since the government fixed the price for an ounce of gold at twenty dollars, the price for an ounce of gold has increased to over $1,800.
Silver too has increased to about $24 dollars an ounce but that price has been as high as $40 per ounce and as low as $10.00 dollars an ounce after the recession caused by “The 1973 Arab oil embargo.”
Real estate is also subject to such severe price swings due to the fact that the value of the U.S. dollar has decreased which in turn has caused price inflation for tangible property, food and other items that keep us healthy and alive.
It is true that the value of real estate has decreased during economic recessions and economic depressions because of the lack of demand for real estate during those times. However, in the long term, real estate values have increased because the world’s population of human beings has increased. More people need more places in which to live, and there is a limited amount of real estate available because Earth is not getting larger to provide more vacant land on which additional homes can be constructed.
How many years will pass before the value of your home will increase? Some people have sold their home that was purchased more than twenty years ago for more than ten times its initial cost. That’s about a 1,000 percent increase during that twenty year time period.
The long-term appreciation of real estate has been the rule rather than the exception since people have been building homes and places of business. It should go without saying that homes built in areas that have public utility service, public transportation, shopping and other modern conveniences are worth more than homes that lack one or more of those benefits for its owner.
Then again, your home can be damaged or destroyed by a fire or a natural disaster such as a lightening strike, a tornado, a flood or a hurricane. That is why it is possible to purchase home owners’ insurance that will reduce your risk of loss in the short term. The reason being is that a damaged or destroyed home usually is not fit for Human habitation.
The value of your home is determined by its utility to you as a safe, clean and healthy place in which to live. How much is your home worth to you? It should be the most valuable item that you will ever own even if it only cost a few thousand dollars.