10-year chart of Dow Jones Industrial Average - click chart to enlarge.
By Troy Corman, www.t2realestate.com
Despite the latest housing slump, Dallas real estate returns over the last 10 years have crushed the Dow Jones stock market returns during the same time frame.
According to the Texas ATM Real Estate Center, the average Dallas home price in July 2010 was $237,000. The $237,000 number is $59,000 more than the average Dallas home price 10 years ago which was recorded at $178,000. This represents a 33% return over 10 years, or a 3.3% annualized return.
In contrast, the Dow Jones Industrial Average has actually lost ground in the same 10-year period. According to Yahoo Finance, on July 3, 2010, the Dow sat at 10,635. More than 10 years later, the Dow has slumped to 10,303.
As Dallas and all of the major Texas cities, including Houston, Austin and San Antonio, undergo dramatic population growth in the next 20 years, the long-term prospects of Dallas real estate are quite promising - particularly areas close to downtown Dallas. Real estate close to the heart of the city will become much more valuable as our population and traffic growth double in size.
With mortgage rates at all-time lows, and home prices at reasonable levels, renting and stuffing money into a 401K that you can't access for decades may be an inefficient strategy. In addition, home ownership allows you to deduct your mortgage interest and property taxes from your taxable income, while rental real estate adds additional deductions including insurance and depreciation. The stock market? Not so much.
To view more Dallas real estate statistics or Texas real estate statistics, visit the Texas ATM Real Estate Center.