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Index shows home value loss not so great.

A condominium purchased in Manhattan in 1985 for $425,000 would have sold for $565,250 in 1991, and the owner's, return on a typical equity investment of 25 percent of the purchase price ($106,250) would have been 22 percent per annum, according to a new table compiled by Heller Equities Incorporated.

The table, called "Heller Equities Investment Table for Residential Condominium Owners: Manhattan," provides an investment appreciation schedule for condominium ownership in Manhattan from 1978 to 1991. The table can be adapted for personal use via an easy-to-use formula for computing the per annum return on the investment of any priced condominium.

The figures come from the quarterly "Heller Equities Condominium Price Index: Manhattan," which is prepared exclusively for the firm by Professor Susan M. Wachter of the Wharton Real Estate Center, University of Pennsylvania. Like the index, which celebrates its one-year anniversary this quarter, the table uses data collected from all condominium resale transactions in the area of Manhattan bound north by 86th Street, south by 50th Street, west by the Hudson River and east by the East River since 1978.

"Contrary to popular belief, home ownership, if looked at appropriately as at least a medium-term (five to seven year) investment, demonstrates a positive return on equity," said Jack Heller of Heller Equities Incorporated." Home ownership was never meant to be a one to two year |killer' investment, added Heller. "I think we lost sight of this fact in the go-go 80's. New Yorkers seem to think they are loosing money on their home investments when in fact history proves they are enjoying healthy returns."

"This table should go a long way toward helping to build consumer confidence," remarked Heller. "We want to help people realize that their homes - which, for many people, represent the majority of their net worth - are money-making investments," added Heller. "If people realize that their homes are indeed working for them, then they may have the confidence to spend money, which will in turn help revitalize the economy."

"We created the user-friendly investment table so people can see for themselves just how stable their home investment is," said Heller. Interested parties can use it as a point of reference or simply plug in their own condominium numbers to compute their own, personal return on home ownership."
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Heller Equities Investment Table f or Residential Condominium Owners: Manhattan; appreciation schedule for New York, New York
Publication:Real Estate Weekly
Date:Jun 3, 1992
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