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Re: monda2frida post# 1193

Wednesday, 11/04/2015 8:06:13 PM

Wednesday, November 04, 2015 8:06:13 PM

Post# of 1560
In the past 120 years, real estate has done very well at keeping pace with inflation. This means that if you bought a home in 1897 it would be just as affordable to the average person as it was in 1997 (prior to the recent run up in prices).

The reason it is so easy for real estate to keep pace with inflation is that it is a primary human need. People need shelter and a place to sleep. This will always be a need and will never go out of style. In order for people to be able to afford a place to live, the prices and costs need to keep pace with wages, taxes, expenses and all other related areas of real estate. Since the CPI is made up of many of these goods and services, it is easy to see why they are closely correlated.
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