Relative appreciation: SFRs, detached/attached Condos, converted apartments

freedomCM_IHB

freedomCM_IHB

New member
IR's post today brought out a lot of strong feelings about the low end:



http://www.irvinehousingblog.com/bl...eserve-learn-from-the-us-forest-service/#more



But what it brought up in my mind, and I don't know the answer/historical data is relative appreciation. Some argue that you just need to apply inflation (wage or cpi?) to the historical values to get present values.



The problem that I see with that is that the buildings actually depreciate. Unless you maintain, improve, update, modernize them, they go down in value! The only reason that they might keep up with new construction is if you keep them functionally and esthetically current, no?



Land, however, barring disaster (including drought, I guess) does go up in value, or at least keep up with inflation.





This all adds up, in my humble mind at least, to SFRs keeping up with (I believe wages-based) inflation over time.
 
But what about condos?



You don't own the land, per se. You don't control the external/structural upkeep upgrades (copper piping, anyone?). You have to pay HOA fees that you can't really control, as well as special assessments, which might be quite costly for older associations.



Is there a difference between detached and attached SFR-style or townhouse style?



And what about all those 30 year old apartments that were converted to condos? No garage, three floor walk-ups?





It would seem to me that the detached should appreciate somewhat less than houses, with attached even less, and the apartment-style ones (at least here in suburbia, NYC or LA are different animals maybe) should basically keep even with investor-level prices for rents.





So if SFRs prices inflate with wages, do the next three classes inflate at 75%, 50%, and 25%? or is it all tied to rents?
 
holy cow there is some sort of malicious adware taking over everything. My firefox browser is acting crazy, keeps forwarding to templated websites. Normal spyware doctor didnt detect anything, MS has malicious software removal tool on update... is that what this is about?



I know computers... never been compromised until today and this weird adware that seems to be on several websites, like the sophia post above.
 
[quote author="LoudRoar" date=1237299130]holy cow there is some sort of malicious adware taking over everything. My firefox browser is acting crazy, keeps forwarding to templated websites. Normal spyware doctor didnt detect anything, MS has malicious software removal tool on update... is that what this is about?



I know computers... never been compromised until today and this weird adware that seems to be on several websites, like the sophia post above.</blockquote>


Yup. While Fire Fox has been a great substitute for IE, as of late, these webpage hi-jackers are taking over. Must be some security hole in FF. Hope there is a patch. Try running adware and spybot. Those shoudl help. Registry is probably all messed up.
 
I would consider a condo a less than prime piece of real estate, which tend to fall farther. Prices have dropped overall, but there's been a flight to quality, which means, say, a condo that cost $500,000 at peak might go to $200,000 while a house that cost $1 mil at peak might only drop to $700,000 (60% drop for the condo but only 30% for the house).



So, if you think there will be another bubble eventually, there is more potential on the upside on the "lower quality" condo over a house. This also goes for houses in bad neighborhoods or with other flaws (next to a freeway, railroad track, or flight plan of an airport, etc.). That is, the lower quality properties have more potential to go up more, dollar for dollar.
 
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