Corvallis Real Estate Market–Projection

By • June 6th, 2009

The Corvallis Real Estate Market is projected to average an increase in sale price of about 4% per year according to U.S. News and World Report. Click to read the article

A 4% increase per year doesn’t seem like a lot until you break it down to a “return on investment” proposition.

Here’s how the numbers work:

Let’s say you buy a house for $300,000 and put 20% down.

  • That 20% is $60,000 (this is the cash investment in the property)
  • If the maket value of the house goes up 4% that’s $12,000
  • Earnings of $12,000 on the $60,000 investment is a return of about 20%.
  • Of course, there are expenses associated with the buy/sell process that would reduce a short term return as illustrated above, but over the long term the cost to hold and re-sell would be dilluted.
  • The example above is for a one-year hold time.  Most people hold their real estate for about 5-7 years, many quite a bit longer.  So over time the benefits expand.

If you keep in mind that 1) real estate is not typcially a short term investment–most people buy for lifestyle reasons–need a place to live 2)no “return” is guaranteed in any investment, real estate has historically been the source of “wealth building” for Americans 3) The real estate market, like any other market fluctuates and it’s never recommended to attempt to “time the market”, then real estate in Corvallis, Oregon is still a great investment.

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