House prices exceeded the 2006 housing bubble peak in 2016, but when adjusted for inflation, house prices may never reach that benchmark.
The NASDAQ recently surpassed the tech bubble high from 2000. Anyone who bought the index in March of 2000 could finally sell their holdings without losing money. While some investors cheer this victory, those investors who didn't take a loss received dollars back from the trade that retained significantly less buying power than they held in 2000. In fact, after adjusting for the erosion of buying power, these investors still lost a third or half of their money. Investors in real estate make the same mistake. I recently demonstrated that an investor can sell a house for $100,000 profit and still lose money by ignoring carrying costs, transaction costs, and inflation. Many real estate industry watchers celebrated home price indices reaching their bubble-era peak this year. But like the stock[READ MORE]