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On average, (after smoothing out the bubbles like in 05-07 and the crashes like in 08-09) real estate prices track inflation. Deflation is exceedingly rate, so
by uiri 9y ago
On average, (after smoothing out the bubbles like in 05-07 and the crashes like in 08-09) real estate prices track inflation. Deflation is exceedingly rate, so this behaviour of nominal prices rising steadily is to be expected. Unless you mean real estate prices rise steadily in real terms, in which case I'd like to see data behind that assertion along with corresponding interest rates as mentioned in another comment.
- BurningFrog 9y agoAcross America prices may follow inflation on average, but in the high tech/low construction centers I think it's rising much faster than that. And that's where people buy housing as investment.
- uiri 9y agoThe only high tech/low construction center is the San Francisco Bay area. Seattle has had a lot of construction over the past few years. Since housing supply isn't perfectly elastic, it can take a few years before supply shifts to meet demand and in the mean time, prices rise. New York is definitely a high tech center but it is also a center for a lot of other things too. I'm not sure if it is high or low construction but there are other factors at play in the high rents there that aren't at play in other tech centers.