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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Tradelite who wrote (16113)1/16/2004 1:22:04 PM
From: GraceZRead Replies (1) of 306849
 
The normal trend on real estate is up, I've never disputed that, it is just not as steep as the recent trend. The long term trend in your area is probably in the 8-10% annual range. After a few years of 15-25% gains it is reasonable to expect the rates to fall below the trend (8-10%).

The way that things revert to the norm isn't necessarily going to a downtrend although I wouldn't rule that out, sometimes the trend simply flattens to get back to the longer term trend. A flattening of the trend below the monetary inflation rate would provide a "real" loss even while prices may rise and make those who counted on an above inflation rate to cover the considerable transaction costs. Of course those who lose money are those who are forced to sell during such a reversion to the mean. Surely you have seen or heard about people who had to bring their check books to a closing when they were the seller.
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