How has real estate performed?

by: Daniel P. Matthews

Real estate has had many ups and downs over the years. In the past several years, real estate returns have been mostly flat. Historically, as with all things, the picture is better. If you can afford to stay the course for the long term you are usually rewarded, and real estate is no exception.

The following table portrays the Rate of Return over the past twenty years for real estate as calculated by Mr. William T. Spitz.

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As the table shows, Mr. Spitz calculates that during the twenty year period from 1971 through 1990 real estate has been a good investment. Mr. Spitz, author of the book "Get Rich Slowly", calculates that in the documented time period the compound rate of return for real estate is 9.9%. Please notice that there is significant variation in the year-to-year rate of return. Real estate, like many other investments, should be viewed as a long term investment not played as a short term opportunity.