The chart shows the real value of homes, adjusted for inflation, stretching back to 1890. The 100 is a mean that prices are measured above or below for the last century. Prices are completely out of whack in real dollars.
House prices will plunge 25% in the next 5 years. Then buy.
Every run up of anything that runs up too much out of relationship to the market eventually must collapse. Here is an article that talks about it with some intelligence.
Kondratiev identified this in his famous curve. It's a natural wave and a speculative sell off has to occur when things run too long too high.
Trees have tops, what goes up comes down and the cure for too high prices is too high prices.
1 comment:
Already bought a house. In 2004.
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