Can someone point me to a couple of examples of instances where the
real estate market went belly up? I am more interested in examples
where investments lost value over a large period of time rather than
short-term losses. I ask because I keep hearing dire warnings of real
estate meltdown, but have personally only seen short-term losses.
Long-term, real estate investment (like investment in the stock
market) seems to increase in value.
The question is not whether real estate increases in nominal value, but
whether it increases in real value.
Shiller attempted to take the inflation out of the time series, and
eyeballing his graph:
http://upload.wikimedia.org/wikipedia/en/thumb/9/9e/Barrons_shiller_06-20-2005.gif/320px-Barrons_shiller_06-20-2005.gif
suggests that if one had bought a basket of US real estate around 1900, it
would have taken until 1950, maybe even 1990, to break even in real terms.
(one might argue that the reason for the "equity premium" over this same
time period was also due to inflation -- everyone would have done better
given a more peaceful century, but stockholders at least retained some
value while bondholders wound up with wallpaper)
-Dave
