Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: JRI who wrote (6095)	5/11/2004 5:40:01 AM
From: Elroy Jetson	Read Replies (1) of 116555

I'm more familiar with West Coast American cities and Australia than I am with Florida. But the concept remains the same. Compare real estate appreciation with local or national GDP (income). In the long run real estate that appreciates faster than income will again meet up with the income trend line, either by falling or failing to appreciate for a long duration. Keep in mind, after implementing the "price stabilization" policies of the 1920's, America, Britain and Germany saw real estate prices fall far below the trend line of income in the 1930's. Even as incomes declined, real estate prices declined further. Japan is currently experiencing a similar phenomena.

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