we saw a 14% to 17% price increase bteween 2006 to 2007. It was double digits for two years before that. Let's be fair and say the run up was 40% from 2003 to 2007. Next let's take into account that money moved from tech stocks into Real Estate from 1998 to 2001. That process started, and the Fed finished, by giving Real Estate a return of 10% for those three years. That's a total of 70% increase in the rpice of Real Estate. Then if you figure Real Estate experts are spouting Real Estate doubles every ten years then that would be a 100% increase since 1998. Realistically Real estate appreciates at about the rate of inflation, or 4%.Cumulative U.S. Retail Price Inflation (Annual Average)1998-2008 = 29.23%So if we deduct 30% or 40% from the 100% that's proclaimed we end up with a need for a 60% to 70% reduction in the price of Real Estate. Let me be real clear that this is the reasonable rate of reduction. I am thinking we are going to lose, as Sniglet has been saying, the 80% from peak and that is just a reality. Rate this comment: 0 0

by Ailin 04:38:42 AM 2013.01.27