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As cars are to Detroit

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POSTED: July 6, 2008 5:00 a.m.

As cars are to Detroit, real estate is to South Bryan and Richmond Hill.

Perhaps that’s overstating it a bit, but it seems clear that real estate is the largest industry in South Bryan. That’s why word that Bryan County is considered by at least one expert in such matters to be one of the top five places in the U.S. in which to buy or sell a home is welcome news for all who benefit from a strong local economy. That includes this newspaper.

The ranking, by nationally known real estate market watcher Danielle Babb, was announced locally last week by Bryan County Commission Chairman Jimmy Burnsed and Richmond Hill Mayor Richard Davis, who shared information about the local housing market along with Babb’s prediction that the value of homes in the local market will soon begin to appreciate by 12 to 19 percent annually.

All in all, it sounds like good news for the local real estate market - and that's whether or not Babb’s prediction of double-digit increases in home values are on target (they could well be, given projections of more growth in coastal Georgia).

Yet it's important to note her projections are more in line with recent trends than history.

That history, according to Yale economist Robert Shiller, shows that if you discount both the housing bubble of the 2000s and the housing boom that followed World War II, the value of American homes since 1890 has increased at a rate similar to inflation, or about 3.3 percent.

That makes sense, since it seems rather obvious few among us would be able to afford a home had their value been steadily increasing by double digits for the past 118 years. That's why we leave you with a little food for thought.

Let's say you bought a home in Bryan County for $150,000 in 1998 and it appreciated in value 12 percent each year without fail. If our math is correct, your home should have a market value of more than $415,000 today. Add another decade of 12 percent per year increases in property value and by 2018 you've got home with a market value of $1.38 million.

Jeff Whitten for the Bryan County News

June 18, 2008

 

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