Submitted by safaria2 t3_11beo3b in wallstreetbets
People keep talking about the impeding housing price crash.
I have no idea if that will happen in the short term but taking a look at a 120-year chart shows homes prices have ended higher in any 30 year period even if someone bought at the peak of 1929.
Yes, yes, I know, "This time is different." I have heard this over and over again except things have yet to be different.
Edit:
Home prices from 1970 to 1980 went up 250% and never went back down anywhere near initial prices. 1970 to 1980 experienced similar high inflation as compared to now.
Yes, real asset prices such as homes increase in price during periods of inflation. On a related note, when inflation stops, real asset prices do not fall back down to their original cost (things stay expensive absent deflation).
Yes, it is unwise to overextend yourself on a mortgage (e.g., high mortgage payment versus income, not having reserves in case of emergencies or the unexpected).
Yes, psychologically people tend to sell low and buy high (e.g., if a person's home value falls below his or her purchasing price then that person may let the property go).