Real estate is like investing in an index like the SP 500. There is no trading involved. You simply hold on to it for 30 years. You can't get stopped out. But when you factor in inflation, real estate prices have been steadily declining as a whole since the 1950's. When you factor in interest cost, property taxes, insurance, co-op fees when applicable and home repairs, you are locking in losses on your investment. The only possibility of high appreciation gains are in a bubble market. Without these bubbles, not only would real estate be a poor investment, it would be a catastrophic one. It takes these massive bubbles just to get the long term mean return equal to the rate of inflation before you factor in all the costs associated with owning a home. The only reason investment property is lucrative is because of the hyper leverage it affords the owner. Without the leverage, there is no money to be made there. Without the leverage you will not have any bubbles. And without the bubbles, you have no zero chance of outperforming inflation over the long run. Over the last 2000 years, the only variable that has moved land and real estate prices higher is real inflation. All real estate is one giant derivative with the underlying product being inflation. In order to value a derivative you must be able to break down its pricing components. When there is a rich volatility premium in real estate and if you get long, you run the risk of having the juice sucked out even if the underlying component stays unchanged. It's analogous to a stock whose option premiums rise dramatically going into an earnings announcement only to have those premiums crushed after the report.