Why Real estate can fall for many years

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"they don't make land anymore" but there is plenty of room to downsize in real estate. Just because people want a bigger house it does not mean they can have one. In poor countries the poor need many things but they still don't have them. Plenty of room to down size:




People might not like living with mum, dad uncle and kids but that’s how most of the world works. In other words there is plenty of room to downsize thus freeing up housing for an extended time, like it or not. I remember driving along in S Africa seeing new housing built by the government on a hill for some tribe and even though they were new they would have been only about 3M x 2M or 6sq m, just like a mini house but just one room. They were flash compared to some other places I have seen. Real-estate has been a good speculative buy using debt leverage, but I would think 10 years or more before it's a buy again. Look at Japan, I have been there a few times, not much space and lots of people yet housing has fallen for 17 years in a row, so that shows just because people want / need land / housing it does not mean they can afford to have it even when cheep. I hear commentators saying “I have been in real-estate for 30 yeas etc.. this is just a cycle”But that’s just the point they were not around to see that last major cycle (The great depression) most people don’t know what a real downturn can look like, and so It just does not make sense (to them) but yet it happens anyway. Here is a key graph that was published well before the current crash:



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