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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (26979)	2/8/2005 12:14:36 PM
From: bentway	Read Replies (3) \| Respond to of 306849

Dollars were worth more in years past. We all have parents that bought houses for what wouldn't even be 5% down now. Anyone got a read on how much residential RE has beat inflation? How much value was lost during the deflation of the depression?

To: Dale Baker who wrote (26979)	2/8/2005 1:13:57 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

since almost all real estate in the US is worth more now than it was in decades past, the inexorable move in real estate must be upward. your interpretation is too simplistic. most of the price rise is just keeping up with inflation. in fact, US housing prices have closely tracked income growth over the decades, going back to the 1800s i think. the only exceptions were after WWII and during the current housing bubble. there was an article about it on this thread (or the credit bubble thread) not long ago. if the idea is that housing prices over the long term are linked to income growth, and prices are now way above income growth, then an eventual reversion to trend is to be expected, believe it or not. But I wouldn't place any big gets on such a sweeping notion the sweeping notion is just logic. it is not designed to be something to place big gets on, or even big bets. this basically falls under a loose version of EMH which states that the ability to spot price disparities is not tantamount to profiting from them. Guess that's why Grantham never impressed me much. it sounds like you didn't really understand him.