The long boom in the real estate market attracted many people into the industry, with the National Association of Realtors' ranks growing to more than 1 million members. Because the upcycle lasted for 10-15 years in many markets, hundreds of thousands of agents have not experienced a significant down market. By looking at down markets in the late '80s and early '90s, we can make some observations on past real estate declines. Price declines are relatively shallow. During most downturns, prices tend to decline in the range of 3-6 percent annually with cumulative declines of less than 20 percent. Los Angeles was the exception in recent history, experiencing a cumulative decline of more than 27 percent. Compare this with the NASDAQ index, which was over 5,000 at the height of the dot-com boom in 2000 and is still at only 2,791 seven years later. Of course, because houses are a highly leveraged purchase, a percentage decline even in the teens can eliminate your equity entire...
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