I dunno what the DJUSREI is, but…

Comment on “” by prock

I dunno what the DJUSREI is, but I can tell you what my expectations are with respect to RE. Downturns typically last for a period of 4-6 years, with the middle years seeing the steepest decline in prices. Unfortunatly, much of the price declines occurs in real terms instead of nominal terms. This is part of the reason why you see so many claims of housing values never going down. The nominal prices don't go down very often, but the value of the dollar does. On the other hand, we are in the middle of the greatest housing bust ever, so we are in fact seeing nominal prices go down.

I expect the real values to fall in the range of 25-40% depending on local conditions, but nominal prices are much more difficult to predict. Right now we're down around 10% overall, but inflation could step in an cap nominal declines at a level around 15-20%. It may take anouther three years to get there.

So depending on how the index works, you're looking at about a 15% return over two, maybe three years? Doesn't seem like a bad spot to put your money, but you might be able to find better spots.


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