The Federal Reserve Chairman was queried by Congress today, with many of the questions surrounding inflation. Many fear the recent "quantitative easing" (i.e., QE) in response to the recession by the Federal Reserve, among other measures by other federal government agencies, will cause inflation. Conventional wisdom holds that real estate is a good way to "beat" inflation as prices tend to rise under inflationary pressure.
An analysis by Andrew Jeffrey of Minyanville, a Website-based investment magazine, seems to indicate home prices have outpaced inflation. He references home prices outpacing the Consumer Price Index (i.e., CPI) during inflationary periods since 1963.
He concludes the 1970's and 1980's showed real estate provided an excellent hedge against inflation. Mr. Jeffrey states real estate investment has been a good inflation hedge, especially during periods of high inflation when other market growth stagnates.
Another interesting point for home buyers and sellers made by Mr. Jeffrey in his article is he says real estate values are not likely to be pushed down in any material way by inflationary pressures.
Home buyers and sellers should be aware of potential changes in the United States real estate market in order to make an educated decision. I am well versed in the South Florida real estate market. Please feel free to contact me in regards to purchasing, selling, renting, leasing or investing in real estate.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
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I beg to differ: Real estate is a dreadful investment in inflationary periods—Mr. Jeffrey is talking up his book.
ReplyDeletePlease see my recent discussion: http://gonzalolira.blogspot.com/2011/02/inflation-hyperinflation-and-real.html
GL
Hi there! this is such an informative post. Thank you for sharing. Cheers!
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