You don’t get rich from a falling market. You get out of it.

Problem is, speculation in fake estate has inflated the price of all real estate.

But what is the value of a property? Most say ultimately it what the next guy will pay for it. Then the next guy, and so on. But real estate is just not liquid enough to be priced that efficently.

Here is how the banking industry determines it. They set an estimate of market value based on appraisals, broker’s opinion, etc, throught the lifecycle of the loan that is then qc’ed by in house appraisers. This value is then tracked to an index valuation. The indexed valuation uses the property valuation at origination as a base. The base value is multiplied by a factor representing area home price appreciation (or depreciation) between the origination date and current. This indexed value incorporates changes in home price appreciation for each area. The indexed value represents the value that the property would be worth if it appreciated consistent with its area, and if the condition of the property remained stable. Thses two very big assumptions are why you need to take avm’s like Zillow, etc with a load of salt. Considering that estimates of value are rendered on distressed assets, they should e lower than the index values, but the difference should be consistent over time.