I've been in my home since 1997 and from the comps I've seen in my neighborhood, it would show average an increase about 5.6% per year if I put it on the market this summer.  I got a pretty good deal when I bought it though.  I haggled and paid about 10% less than what I saw similar homes at.  I'm pretty happy with that.  Where else are you going to get 5 1/2 or 6 percent on your investment and have that investment put a roof over your head too?

Mike, the math works pretty much the same with my sellers, as long as they bought around 1998 - 2002. Whoever bought after that, the appreciation is a lot lower.

Now, if I could only convince one of those sellers of mine that a 6% appreciation a year is pretty darn good right now and that I don't think she's going to get the 9% she's counting on! It would be such an easy sell!

The NAR is running a commercial on local TV. The message they are trying to convey to consumers is exactly what Mike has suggested. The fact that a home will double in value in 10 years.

So, just like Chico Escuela used to say, "Baseball been bery bery good to me".

If your calculate the cash invested a real estate deal, the appreciation on the investor's cash, is a much larger number. If the owner had a 10% down payment on a $200,000 house, they would have $20,000 invested.  5% a year appreciation would yield a %10,000 profit each year, so year one, the buyer has earned 50% on his $20,000, all with favorable tax treatment.