I think that the prices unfortunately will be priced in dollars, adjusted for devaluation. We have lost about 40% of the value of the dollar since ’01, so actually the prices aren’t that bad on housing, even now.
The caveat is that if wage growth or loan creativity cannot keep up with this devaluation, then prices will have to fall even further on housing.
The “inflation” that the gov’t cites for us, at around 3% is so far removed from what is going on, it’s not worth bothering with. They stopped publishing the M3 money supply, but it is guesstimated to be running at around 12% like 4plexowner wrote. It’s not a stretch at all to expect our prices to rise by this much, although there can be lag.
