States like NC, TX, GA, NM and etc will get more and more expensive year after year. They only grow at a smaller percentage average annual rate, like 3% a year over the long term. However, densely populated states will grow at 7%+ average annual rate over the long term. If you use these 2 rates to project over next 20 years, you will see all places go up in value. The difference is densely populated area go up faster in value than sparsely populated area, the gap will be widening.

DC is land-locked similar to California. A land-locked place combined with nation’s highest family income is a formula for fast price growth. Historically, DC region has yielded 7.2% over past 50 years. However, we need to be aware that the last 50 years was only a warm-up period before the next 50 yeras. Why I say it’s only a warm-up period? because over the last 50 years, DC region didn’t experience as much land-lock situation as it’s going to happen in the next 50 years. 2004 was the first year that Montgomery county and Fairfax county first approached complete built-out condition. It took over 50 years to reach that state. Now, as soon as this critical threshold is broken, hell will break loose, faster appreciation rate will unfold. So, I would say next 50 years may yield higher than 7.2% rate, it could be 9% rate going forward, similar to California situation.

1) Long term patience
2) Moving there
3) holding lots of low-price houses.

Without 1), you can’t do 2).
Without 2), you can’t do 3)
Without 3), you can’t retire.

The only way to beat competing high growth areas is by compensating it with 2 times more houses.

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Simple because it’s proven to be the most effective way to get rich. And it doesn’t require a lot of knowledge of economics and theories. A lot of blue colar workers got rich that way. Countless restuarant owners got rich that way. The most complicated part may be tenant selection and mortgage loan applications.

It’s also hard: Because most people don’t have patience. They want to see immediate result. Also, RE is often a burden that they have to hold for bad periods as long as 5-7 years without any visible return. Most people are not trained to put up with this boredom. They lose patience faster than the market can come back to vindicate them. Also, most people are not trained or programmed to borrow 1 million dollar and feel comfortable.

Many people don’t go deep into real estate supply and demand research, but I do. Florida is very unique because it has a land-lock geographical condition. Florida is a pan-handle shaped state sticking out into the Caribean sea. It’s completely surrounded by oceans. On the west front, it’s facing Gulf of Mexico. On the east front, it’s facing Atlantic ocean. This is a typical land-lock formation. What is “land-lock”? Land supply is limited. In the middle of this state, most of the available land are now prevented from development to protect rain water migration from North to the Ever-glade National park in the south. The only available lands are concentrated along the coastal regions. During the past 6 years, most of these developable land were already reserved by big and small builders. Even during the current housing recession, most of them are still holding tight to these land with something called land purchase options. Therefore, as people continue to migrate in from other states in the US, and more and more people (with money) migrating in from South American countries, land supply will be diminishing very fast within the next 20 years. I am seeing that a rapid urbanization will happen in next 2 decades, and price may potentially approach today’s California level. Yeah, you may argue, Florida is Hurricane prone. But don’t forget, California is earth-quake prone, does that stop people from migrating into California since 1970? No. Due to the lower price in Florida, combined with beach, great environment, improving job creation and urbanization, I am seeing Florida is replaying the slow and giant transition like what has happened in California some 30 years ago.