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

To: bentway who wrote (26980)	2/8/2005 12:27:35 PM
From: Dale Baker	Read Replies (2) \| Respond to of 306849

I was wondering about real-dollar gains in real estate myself. But the real point was the circular logic of saying all markets will return to their true value eventually. It begs the question of what fair value really is, and the factors (supply, demand, input costs, financing costs, general inflation, alternative investment choices, relative importance of shelter to a consumer, etc.) that determine the magical mean that all markets revert to periodically. Lots of rhetoric that tells us very little in the end.

To: bentway who wrote (26980)	2/8/2005 12:42:31 PM
From: John Vosilla	Respond to of 306849

One flaw in any chart of percentage increase in home values is that the average size of a home has more than doubled in a generation and existing product also has had significant remodeling and additions over the years. One astounding study is that over a 30-40 year period you'll spend 3 times the original purchase price of a single home in maintenance, repairs, remodeling and additions. In many areas during the depression as much as 90% of the property went back to the counties for back real estate taxes. I don't think that will ever happen again but something as severe as the Houston and Dallas bust from the mid 80's forward could be a model for many coastal markets this next cycle. IMHO over time you give away much of your perceived appreciation over the inflation rate in expenditures anyway. In local markets you come out way ahead in short term periods of rapid appreciation like is occuring along the coast nowdays and lose in either flat or declining markets.

To: bentway who wrote (26980)	2/8/2005 8:36:12 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

This chart shows how real estate prices rise in tandem with incomes. The charts shows home prices declined 50% during the depression. Construction cost, shown on the chart, are a good proxy for the CPI. One the other hand, the CPI Rent Index is a fantasy number used by the government to under-report inflation. This chart is updated yearly to 1987 and is made up of just a few points after that date. home.pacbell.net The home prices are a series of Los Angeles same home prices reappraised every three months by the Appraisal Association.