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Why Home Prices Will Appreciate Again

Let's take a look back in time to the mid 1950s, and at just one item that Americans loved then and still do now ... a Coke.  Coca Cola by the bottle sold for a nickel then.  The 5 cent Coke soon disappeared, and you can pay over a dollar for it today.  We all know this, and aren't really that alarmed by it.  Prices always go up over time, and it's easy to use the cola to illustrate this fact.  Their exact ingredient mix isn't published, but many sources tell us that there are only three to five ingredients used to create a Coke.  One of course is sugar, so we know that sugar prices change not only over time, but in relation to weather as well.  However, it's a certainty that the laborers who work in the sugar industry will always be asking for higher wages.  The manufacturing of a bottle of cola is in one plant and takes very little in the way of time.

How many ingredients go into the construction of a home?  Thousands, probably tens of thousands, is the answer many people would give you.  How long does it take to build a home?  How many people are involved in a home's construction as compared to a bottle of cola?  You can see where this is going.  These many thousands of items involved are all subject to rising prices.  Also, previous news indicated that the government was to print more money to buy government bonds to influence long term interest rates and was and still is being criticized as the beginning of higher inflation.  Rising prices has been a fact of life in this country and most of the world throughout history.

Prices will continue to rise, though predicting the rate of rise is not something easy to do.  Home prices will again rise.  When the current glut of foreclosures and troubled mortgages will work out is not known, but it will, and prices will stabilize and turn to the positive in trend.  It's very unlikely that we'll ever see price increases ever again as in the period leading up to 2006, but they will begin to rise.  If your plans are for long term home ownership, taking advantage of today's very low interest rates and bargain home prices may be a great plan for your future.

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