The one chart that tells you all you need to know!

If you are not yet convinced that a long-term hold of residential property may not be the best investment, then this chart should convince you. This is the chart of the overall US Housing Price Index, adjusted for inflation. The dashed line is the linear trend line for the chart period. Over a 45 year period, the inflation-adjusted HPI went up 155%, or 3.4% per year. And that's using the "official" CPI data; and we know the Bureau of Labor Statistics constantly adjusts how they calculate the CPI (i.e., to keep it at a low number), so that the 3.4% annual return could actually be 0%.

For that same period the CPI went up 490%, which diminished the 758% increase of the HPI.

Excellent inflation-adjusted returns can be achieved in residential real estate, but you have to know when to BUY, in WHICH market, and when to SELL.


While the official CPI published by the government is constantly manipulated to keep it low, the real-world CPI is higher. One source does this alternative calculation and comes up with a CPI about 2-3X the official CPI (

As you can see from this chart, this divergence started around 1980.

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