Many people are asking, “What do you think will happen if I buy now and hold for five years?” 

You may be surprised to see that this “bubble” is not nearly as big as the 3 five year periods from 1973 to 1988.  1973 to 1978 is the highest appreciation period. The lowest appreciation period is the five years that followed those dramatic increases for 15 years, and still not showing a loss for any five year period going back from third quarter 2008.

Five Year Price Changes based on U.S. 3rd Quarter average prices of homes sold.

Sold in 2008 at $283,400; bought in 2003 for $248,100 – UP 14.2%

Sold in 2003 at $248,199; bought in 1998 for $184,300 – UP  34.6%

Sold in 1998 at $184,300; bought in 1993 for $148,000 – UP  24.5%

Sold in 1993 at $148,000; bought in 1988 for $141,500 – UP  4.6%

Sold in 1988 at $141,500; bought in 1983 for $ 92,500 – UP  52.9%

Sold in 1983 at $ 92,500; bought in 1978 for $ 63,500 – UP  45.6%

Sold in 1978 at $ 63,500; bought in 1973 for $ 35,900 – UP  76.8%

Sold in 1973 at $ 35,900; bought in 1968 for $ 26,600 – UP  34.9%

Sold in 1968 at $ 26,600; bought in 1963 for $ 19,200 – UP  38.5%

Note: U.S. Peak Price to date 1st Quarter of 2007

Sold 1Q 2007 at $322,100; bought 1Q 2002 for $227,600 – UP 41.5%

Data Source