My own guess based on long term interest rates, economic weakness, rising taxes, and the money supply lead me to guess that real estate will go down by 3-5 percent per year and have hiccups of 1% raises during these periods.
I feel that this trend could continue for 10 years (or more).
Looking at historic bubbles, risk aversion, and the changing capital markets (as well as Middle class America taking on huge debt and outsourcing) – I’m making my guess that this is what is going to happen.
Also with the baby boomers retiring, and their incredible lack of savings, this leads to long term economic malaise.
Just a guess! But I wouldn’t be even thinking of buying for 2 years. That is my personal time period to assess the market.
Who really knows? But looking at the unsustainable price increases, the investor speculation and the number of sub prime, low equity, highly leveraged mortgage market, I see long term, not short term corrections with a snowballing sentiment.
