Multi-family and apartment appreciation

[TJ Thompson]

I'm curious, over the past couple of decades, have apartments and multi-family buildings generally appreciated in market value at the same rate as single family residences?

In other words, will my equity growth only be in paid principal or will it also come in good appreciation.

Now I understand every market (time, location, demographic) is different, I'm just looking at how these compare to single family residences over the long haul on average.

Thanks,
TJ

[Jon Holdman]

Barbara, the Case-Shiller data shows that appreciation tracks inflation, over the long term. There have been three major events where this was disrupted. One early in the 20th century (downward shift), once after WWII when lending guidelines changed (upward shift), then the recent bubble. I predict that bubble will be worked off, and we'll be back on the long term trend before we start seeing appreciation resume.

According to the CPI inflation calculator, inflation has averaged 4% from 1950 to 2000. That is, $1 in 1950 is equal to $7.14 in 2000, which equates to 4% annual compounding.

Don't even believe the "median home price" statistics.

I would still content that income properties are based on income, and don't track the appreciation of SFRs, which are based on demand from homeowners.