Can real estate ever depreciate?

Answer 1

yes, easily....
build a sewer next to it, a toxic dump, nuke it.... industrialize... bad neighborhood... gangs... whatever...

Answer 2

there are a few different kinds of depreciation

If you mean the reduction in current market value, well yes, market conditions change, largely dependent on supply and demand, the higer the demand, the higher the prices, the lower the demand, likely prices will go down or stall.
However there is plenty of historical data that will show you , where ever you are that over a 10 year period real estate average values are most likely to go up in most if not all areas.

There is another type of depreciation
for tax reasons people can write of the value of the improvements of a property (buildings, shed, etc) over a longer period of time we in canada call it depreciation, and can only be done if the property is used for some commerial purpose and or revenue purpose.

a third method of depreciation occurs when improvements on a property ( buildings etc) wear out, like the roofs, carpets, etc, and or its design, some will refer to that as depreciation as well.

I hope this answers your question,

The good thing with most real estate is, if you keep it long enough it will go up in value, just wait and see.

Answer 3

Sure. You can take a depreciation deduction on your taxes for rental properties and home offices. Real estate value can also go down - case in point - the current real estate market.

Answer 4

Sure! It has before and is happening now!

Not sure, but............

Keep in mind...........


Times and markets are changing!

In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???

This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.

From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!

With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!

For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:
http://www.brokerforyou.com/brokerforyou/

http://www.san-diego-for-sale-by-owner.com/
http://www.downtown-san-diego-real-estate.com/
http://www.palermo-homes.com/
http://www.poway-real-estate.info/poway-real-estate-brokers.htm
http://www.los-angeles-real-estate-brokers.com/
http://www.orange-county-real-estate-brokers.com/
http://www.san-francisco-real-estate-brokers.com/
http://www.san-jose-real-estate-brokers.com/
http://www.brokerforyou.com

Answer 5

Yes, real estate can loss and gain value. It will depend on a lot of factors, including the market, location, condition, etc.

Answer 6

You bet! If your neighbor decides to make his front yard a junk yard, your property will be devalued. Then there's eminent domain which has become a horror to many long time homeowners recently. When big business (not just the government) decides your land would make a dandy mall, or Walmart, they have money and resources to change your zoning code. So long home.

Answer 7

absolutely !!! if u buy,say,a 200,ooo home,keep it for 20 years,but never repair ,repaint,or clean it,anmd let it start to fall apart,u wont get 200,000 for it.if u keep the house up,and even make improvements,u'll get more than u paid for it. if ur neighborhood was gr8 when u moved in ,but now its gotten run-down,surrounded by crack houses or something, ur land and home will depreciate,as no one will want to live there.

Answer 8

Contrary to what some in my business will tell you, YES! Southern California has gone in cycles my whole life. The overall trend is up, but that doesn't help if you bought at peak and have to sell at trough.

Answer 9

yes, and in other news 1 + 1 = 2!!

Answer 10

Ever seen Detroit?

Answer 11

Sure it can. It is very speculative. Neighborhoods/cities change constantly.