For nearly the entirety of the first decade since the dawn of the 21st century, investors predicated their real estate investments on the historic rise in home values. Between 2003 and 2004, Phoenix home values rose 55.2 percent, according to CNN. For a home to double in value, however, usually takes at least 10 years.
The average gain in home value is not predictable and depends heavily on the specific location of the property. Overall, you can expect a 5 percent annual rise in home values, so it takes between 10 and 20 years for a home to double in value, according to Housing Watch.
Look at the historical trend in home values for the area where the home is located, then divide the average annual return by 72 to get the doubling time, according to Your Mortgage.
Is Real Estate Worth It?
Even if your home doubles in value at the average rate of 5 percent, you may not see any profit if you have a mortgage. Most mortgages have an interest rate of about 5 percent or more, so at best you should see a neutral return on average, according to Housing Watch.