Again, the high price tag, as well as the option of owning versus renting, of RE makes it a luxury, not a commodity. In the end, what counts is actual demand -- those who can afford it, not just desire it. That equation involves income and available lending.
In an inflationary period, is it likely that incomes and lending rules will keep up? If not, then inflated prices will further drive down RE demand. In addition, inflation makes U.S. debt less desirable. Do you see creditors allow their current stakes to be continually devalued?
This is a great debate. I in the camp that inflation is going to be an out come caused by poor goverment actions. Social Security, Medical Funding, Refy of Government Obligations, Refy of Priviate Obligations, and Etc.; I have some bad news, the greatest generation and the baby boomers have sucked it dry baby. We need to inflate or generation X is supper screwed. The baby boomers have pentions, IRA, 401k's, Social Security,.......etc., but they will be the first to tell my generation that my benifits may not be thier when I retire. That is crap, I have no debt like most of them, and the generation behind generation X is big enough to change the politics in the US. Inflate the economy or start funding the programs that will help the next generations. Tax or inflate its really that simple, because I want to retire at a reasonable age of 65 not 72 for Social Security. I would have liked a pention instead of a 401K that I mostly funded. Its crap and that is part of the reason Reits will increase in value, its called Inflation Dummy.
I disagree. Real estate is a luxury, not basic, commodity. Unless salaries stay up with inflation, people will have to choose between owning real estate or critical needs such as food, water, oil, gas, etc.