Is Appreciation better than CF? CA Cities Historical Appreciation

[J. Martin]

A lot of California investors have talked trash on BP about how much they make on appreciation. I just wanted to post some data to back up that trash talk! lol

Since 1980, you've made 350-800% in cumulative asset appreciation through the 3rd quarter of 2015. Of course, where you were - inland, coastal, or SF, made a big difference!

CALIFORNIA CITIES PRICE APPRECIATION SINCE 1980
San Francisco, Oakland, Los Angeles, San Diego, Sacramento, Riverside, CA, & US

If you had the average appreciation of the United States, your home appreciated about 350% over this period. Surprisingly or not, inland areas like Riverside and Sacramento had price appreciation barely above the national average, at 375-400%. Coastal areas like Oakland, LA/Long Beach, San Diego, and the average for CA delivered 500-600% asset returns. And if you had enough foresight (or luck) to buy in SF, you've experienced just over an 800% return, let alone the rent growth over this time.. It was interesting to me that some of the marginal inland areas like Riverside and Sacramento rise towards coastal levels during booms, then head back toward US levels during busts..

BUT IT'S NOT ALL FUN AND GAMES

CA is volatile! Especially over this last cycle. And especially in lower-end or inland areas. Do you want to be flocking towards those areas today..? Hmmm.. Some lost more than 50% in the last crisis, and they tend to boom off the bottom..

[Aaron Mazzrillo]

The lesson of the day, if you live in California, buy California. I bought stuff at the top of the market in 2006-2007 and I'd still prefer any of those over a house in the Midwest. I think prices are quite high now, but I'm still buying houses to hold as rentals. I have one in escrow and made offers on several more just this weekend that I'd keep any of them if/when those offers get accepted. As though in the know say; it isn't the price, but the terms that make the deal.

Some might think that I'm taking seller financing because of the use of the word 'terms,' but I'm taking cost of money in general. Paying too much for your money? Find cheaper dollars. There are millions and millions, tens of millions, hundreds of millions of dollars sitting in IRA accounts being devalued by inflation and fees and the owners of those accounts are doing nothing with that cash. Find those people, do your best elevator pitch and put that money to work.