In the past 36 months Real Estate has seen a decrease in its average mean value, depending on your metro area, an average of 12 to 32 percent. This is referred to as deflation (in economics, deflation is a decrease in the general price level of goods and services). Deflation is not necessarily bad for everyone, especially for new market buyers that need a more affordable housing price in order to purchase.
Ultimately, a stable market economy strives for price stability. In Real Estate this is usually meeting or slightly beating the United States inflationary rate (the opposite of deflation and normally measured with the use of a publicly posted index called the Consumer Price Index). A stable Real Estate market typically lasts many years and almost always follows a Real Estate Recession. In fact the bulk of years within the seven to ten year cycles, represent a stable Real Estate Market. Therefore, 80 percent or more of the historical annual appreciation in real estate has valuation increases at or just above inflation.
For those of you who are business people, you likely seek investments that are stable, predictable, and going up in value each year. The conservative investor should consider buying during Real Estate market cycles that hold a stable future with somewhat predictable results (i.e. less speculative). Such a market is likely to exist for the next 5 years. For those of you sitting on the sidelines wondering when to enter this market, it is time for you to jump in, prior to any inflation, and thereby purchasing at the bottom. Anyone who classifies themselves as a conservative low risk real estate investor should certainly enter the market right now.
What about HYPERINFLATION?
