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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Oblomov who wrote (352)8/28/2001 10:57:37 AM
From: chomolungmaRead Replies (2) of 306849
 
Yes, real estate agent hype is often taken as fact.

In reality, residential real-estate is a “non-productive asset.” It does not produce anything and therefore does not generate any real economic return. Any investment gains from a home are due to inflation, leverage and the shortage premium in certain areas.

The notion that homes can appreciate faster than the rate of inflation forever are ill-founded. It’s more likely that after property taxes, maintenance and improvement that residential real-estate actually has a negative return.
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