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

To: Don Green who wrote (36115)	7/24/2005 1:11:05 AM
From: Lhn5	Read Replies (1) \| Respond to of 306849

Sure why wouldn't it be? The assets go up in value and the relative value of the debts go down.

To: Don Green who wrote (36115)	7/24/2005 1:34:45 AM
From: Mike Johnston	Read Replies (2) \| Respond to of 306849

Yes. In the last 2-3 years the winners were those, who loaded up on mortgage debt and bought as many properties as they could. In the long run, if you own your house outright, it is a wash. Its nominal value will increase significantly in hyperinflation, but then when currency is replaced its nominal value will decrease. In the end it is still going to be the same house, its real value will be the same whether it costs 1 million, 100 million or $100 000. The only concern is the debt and how and when it is paid off. Right now we have a real estate bubble which means that we have experienced both nominal and real increases in house prices. Therefore at the end of hyperinflation ( when the new currency is introduced )one would expect to have prices decline on both real and nominal basis as i have described in my original example. IMO house prices have reached a peak on real basis and will decline, but they could still increase on a nominal basis.