hey folks my name is chris at hauseit based here in miami florida today we're
going to talk about an interesting topic in economics as it relates to real
estate that you might find interesting and that
is why did americans purchase real estate
in the 1970s to protect against inflation when inflation was quite high
and ultimately calmed by volcker by raising interest rates to almost 20
percent in the 1970s
well you know in an inflationary inflationary environment like that
people start to expect higher pricing on things the the purchasing value of your
money and your paycheck goes down so people start buying things up in advance
and they start purchasing things that can hold your value and as we discussed
in a previous video real estate is often considered to be
one of the best inflation hedge assets precisely because
prices typically go up because there's more money chasing
you know the same amount of goods and services and assets and also because
landlords have pricing power for their investment properties they're able to
raise rents typically at or inflation plus so
above inflation to keep up with inflation so
you know from the from the monetary perspective because
in an inflationary environment this is typically caused by you know as we
discussed more money chasing the same amount of goods and services and assets
there's usually a lot of money printing debt monetization which is essentially
the the federal reserve or the central bank buying a lot of you know
government debt and building up its its balance sheet and as a result there's
more cash and or more money being created and circulating
so as a result what people end up doing and what
americans did in the 1970s is they realized that hey in this type of
environment it probably makes sense to start buying
finite assets that can hold their value and you know what better finite asset is
there than real estate and of course you know as we've discussed before for
example in our video on over building affecting the real estate market in
miami sure you know there can be a lot more supply built as well which is
why we recommend you know buying things that are are truly you know more finite
that they don't really make too much of any more which is why there's a saying
that in the 1970s americans bought lots of waterfront property which are things
they don't make any more of now again here in miami or even in new york
you know you can translate that to nice condominiums or newer condos perhaps or
condos that are you know directly waterfront or a beachfront with nice
views that you know it's harder to even with a future building they won't be
able to make more of so that's just one way to get around inflation this is why
real estate is such a popular asset class along with other you know
inflation hedge assets and you know those traditionally may be considered to
be such things as gold you know other commodities and such you know
even stocks that that are of good companies that are able to
raise their pricing along with inflation and to offset their their
you know their costs and such so these are all different types of inflation
hedge assets of course we forgot to mention
cryptocurrency so it's really you know it's just whatever whatever floats your
boat in terms of preferences you know investors favor a lot of different
things they have different individual preferences for what they hold but
inflation but real estate is certainly a very
well-known one that has stood the test of time during high bouts of inflation
in the past we hope you found this video helpful if you have any other questions
feel free to drop a comment below we'll get back to you
that's actually the easiest way if you're looking to buy or sell a place
shoot us an email team@hauseit.com that's h-a-u-s-e-i-t
dot com or check out our website where you can learn more about our various
services we can help you save up to six percent all in all broker commissions
when you sell with our agent assisted fsbo service and if you want something
more hands-on we have a one percent for full service listing option
and we also can help you save two percent or more when you buy
with a Hauseit Buyer Closing Credit where we give you two-thirds of the
buyer agent commission subject to us keeping a small minimum my
name is Chris at Hauseit we cover all of new york
including new york city long island and the hudson valley and we cover southeast
florida miami-dade county broward county
palm beach county martin county and st lucie county my name is Chris at Hauseit and
we'll see you on the next one