The 90’s in Japan is known as the lost decade. After a real estate bubble from ‘86 to ‘90, the country went through a decade of stagflation.

In 2007 property in Japan appreciated for the first time in 17 years. During the lost decade, the interest rates were cut down to nothing and government spending went rampant.

The U.S. has responded in a similar way with cutting interest rates down to zero, bailing out banks and huge spending bills. Artificially low interest rates and bank bailouts slow down the ride to the bottom.

Real estate continues to be propped up and steadily depreciates as market forces bring it down, instead of just letting in crash, hit bottom and then begin a recovery.

With intervention it could take a very long time for real estate to appreciate again. Could 2022 be the best time to buy right before the bottom? Well, based on what has happened in Japan, 17 years is not as arbitrary as saying “oh, it will get better in 5 years.”

Bradenton Lakewood Ranch Property Manager

photo by kevindooley

Related posts:

1. Where’s the Bottom?
2. What Next?
3. Florida Foreclosure Pain Continues