As you may have noticed, prices are beginning to bottom out, and we are at the beginning of the end of this depreciating cycle. The next six months will specifically reveal exactly where that bottom actually was. As with any economic cycle, you never know the exact bottom until you've past it. The foreseeable future for the single family home market in Dade County is that we will soon return to a state of predictable equilibrium, where the forces of supply and demand create a balanced market with roughly six months of inventory; we now have twelve months of inventory. In other words, single family homes will once again return to a "normal" appreciation rate of 4-5% per year. This was the historical appreciation rate for real property in the U.S. from 1900 to 2000. From 2000 to 2006 political and economic influences, coupled with unregulated and unrestrained lending practices, led us to an unrealistic bubble.
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