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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Metacomet who wrote (59789)8/11/2006 6:00:02 PM
From: Elroy JetsonRead Replies (1) of 306849
 
Over the long-term, changes in real estate and home prices have matched changes in income.

In the short-run income and real estate prices don't always match up because humans are often irrational. This bizarre behaviour is enabled by debt.

Over the past ten years we have seen incomes rising by low single digits, and recently declining - while real estate prices have been increasing at double digits.

Of course these prices will collapse and revert to once again matching incomes, just as they always have.
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