The Death of Real Estate?
With all the talk of the death of real estate as an investment, I thought it would be helpful to compare our local market with the Standard & Poors 500’s performance over the last decade. The S&P 500 is a weighted index based on the stock prices of 500 large, publicly held U.S. companies. If on New Year’s Day 2000 an individual bought a $100,000 home in Knoxville, and invested the same amount in a fund based on the S&P 500 index, the present day value of the home (if properly maintained) would be $141,810, and the present day value of the fund would be $70,028. A decade later not only is your home worth twice as much as the fund, but you have enjoyed a place to live and have received the tax benefit of the interest deduction if you carry a mortgage on the home.
* Statistics from Knoxville Assoc. of Realtors Median prices for 3 bedroom homes and www.standardandpoors.com
Reprinted from Knoxville News Sentinel, Home Market Now, Oct. 25, 2009
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