Prices do not always go up

[Chris Seveney]

Contrary to popular belief, values of real estate do not always go up. What makes it more difficult today more than ever is the economy is global. For example how many of you know that what the Japanese are doing with their interest rates could have a significant impact on our banking industry because they stop buying Treasuries. How many are understanding potential Basel III implications on the mortgage market.

Boiling things down into simple terms, think of the game monopoly, if the banker doubles the amount of money they have and gives it out to players, will players pay more for properties? Now the banker cuts back the amount of money - will people still pay the same? 

I am not all gloom and doom, but also not one who is placing 5% appreciation in my forecasting models at this present time. 

Be smart does not mean do not buy, be smart means understand what all outcomes can be and how you can mitigate them.

US Property Prices Fall Further, Weighed Down by Apartments, Offices (costar.com)