Actually, housing moving at or below inflation makes perfect economic sense to me. Remember that the structures depreciate and have to be maintained and eventually rebuilt. Only the land should appreciate.
Perry – OK, so where do I find a house without the land ? Used mobile homes are the only example I can come up with. So, yes I agree with you that used mobile homes should depreciate. Otherwise, I don’t buy that houses should deflate from trough-to-trough or peak-to-peak in RE cycles.
I have to say that the likelihood of hitting 1998 prices, which correspond to a 15% real decline from previous null (1995 prices) is less likely than the NAR predictions of being correct.
