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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Mike Johnston who wrote (25947)12/14/2004 10:57:04 AM
From: KyrosLRead Replies (1) of 306849
 
Hi Mike. There are many counterexamples to your inflation list that show deflation rather than inflation. Here are some.

In my area, Florida, property taxes are capped at or below inflation for those that stay put in their homes. My real estate taxes have hardly increased in the last decade or so, and will remain capped, since I have no intention of moving. California and some other states also severely restrict tax increases for existing homeowners.

We live in an information society, and information and communication is very valuable for many people. The cost of information and communication over the last few years has crashed. I spend a lot of time communicating and getting informed, and I pay almost nothing for it. I would have spent a fortune doing the same only a few years back, and a couple of decades ago what I can do today for pennies would have required thousands of dollars, if it could be done at all. This morning I read in the WSJ that Google will be making available millions of books from a number of university libraries for online searching -- for free. Skype, allows you to phone around the world for 2 cents a minute -- or for nothing to other skype users. The examples are countless.

Manufactured goods have been on a deflationary trend for some years now.

Health care has increased a lot more than inflation, but so has life expectancy and quality of senior life. US life expectancy has increased by SIX years since 1973. There is no hedonic adjustment for health care (yet <g>) but I wonder how much value we can put on six extra years of life. My hunch is that it's worth a lot more than the extra (over CPI inflation) increases of health care, for the average person.

Finally, although houses have increased much more than the inflation rate in the last few years, rents have not.
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