brick and mortar investment…. maybe not yet

Many countries and many people do still believe that investing in a house, the so-called brick and mortarinvestment, is nearly risk-free. There are some ones, especially at the US and UK, that they have learnt this is not abusiness risk free but an investment business as any other with is up-and-downs.

At the graph I include in this blog today, it is easy to see how many “traditional investment thinkig” on brick and mortar is totally wrong

People that bought their houses in 1970, would have got a 50% valuation increase (inflation corrected) by 1980. However, today, the same home (only 40 years older) is valued at 15% less than in 1979.

Median home price variations

“Advanced investors” looking at what was happening with the housing demand and price afte 1990, started to invest. Those that invested midways towards the pick, like 2002, got valuation increases of 30% in just three years. However, today their some houses are valued at 20% less than what they paid in 2002. Those unlucky families or investors inverting in 2005 have houses that have lost over 30% of the original value.

Will the sell of houses continue in the nerar future, or are we seeion the bottom of the hosing market?

Is this coming to an end?. Giving the numbers in the chart provided by chartoftheday, it could be. However, there are some areas around the states with too many Sale signs. And if you move to England, Australia or Spain, the first 2011 quarter was negative.

So, wait and see