Very good way to think!
Thursday, November 8th, 2007I think it can be explained by:
lack of compound growth. If we assume a fixed annual 7% appreciation, mathematical compount growth will allow it to double in 10 years. However, if it stops behaving linearly, then it can no longer compound, the assumption falls apart. Real estate market is non-linear. It may continue to rise for 5 years with 15-20% for each of these years. I still remember in 2004, my community jumped > 100K in a year. In 5 years, the market could accomplish the task that it is supposed to accomplish in 10 years. Yes, you are very right, we can only think in terms of equivalent annual average appreciation rate, rather than real appreciation rate.
investment property