How to handle the 'real estate always beats inflation' conversation this year

You’ve probably said some version of “real estate always goes up” more times than you can count. This year, the math doesn’t back you up.

Inman’s own reporting, based on Realtor.com’s midyear update, puts 2026 home price growth at roughly 1.2 percent, trailing projected inflation of 3.4 percent. That’s not stagnation. That’s a real-terms loss on the asset everyone in this industry is trained to call a sure thing.

Here’s how to have that conversation with a client this week, without either overselling the deal or losing it.

1. Know the actual number before the client brings it up

A lot of agents are still saying “prices are up” because, technically, they are, nominally. But a client doing their own napkin math on inflation will get to the real number faster than you’d expect, and if you’re caught flat-footed, you look like you either didn’t know or didn’t want to say.

Know the 1.2 percent and the 3.4 percent before you’re asked. Thanks to Inman’s fast reporting, hopefully you’ve got that checked off already and are keeping tabs on it regularly.

2. Give the client the nominal-vs-real distinction in one sentence

You don’t need a lecture. You need a line: “The price is going up a little, but not as fast as everything else is getting more expensive, so in real terms it’s roughly flat to slightly down this year.”

Said plainly and early, that sentence builds more trust than avoiding it ever will. Practice that line a few times now, aloud, before you have to use it with a client.

3. Redirect to the value drivers that don’t depend on appreciation

Appreciation is only one lever. Here are a few things you can remind your client:

1.  Principal paydown builds equity every month regardless of what the market does.
2. Improvements can force appreciation a market won’t hand you for free.
3. A rental property’s cash flow doesn’t care what the comps did this quarter.
4. Remember the important question, “Compared to what?” For example, renters are paying rents that are up about 2.2 percent between February and May. If they continue to rent or go back to being renters, they lose the appreciation but also have no control over how much their rent increases. On the flip side, if they are the landlord, low appreciation can be counterbalanced with higher rents.

Walk the client through whichever of these actually apply to their situation, so the conversation isn’t resting on a single number you can’t control.

4. Hand every buyer this gut-check question

“If the price never moved a dollar, would this house still be worth buying for you?” If the answer is yes, because of the life it supports or the equity it builds through paydown, the deal stands on its own. If the answer is no, that’s worth knowing before closing, not after.

5. Ask yourself the same question

This is the part most agents skip. You coach clients all day on not betting their whole plan on one number. Here’s what that actually looks like in black and white: assuming your own future is covered because property values go up, with nothing else built underneath that assumption.

In 2007, my husband and I were touring homes in the fastest-growing neighborhood in the country: new construction everywhere, prices climbing every month, the kind of market where waiting felt like losing money. We found a place we loved and were about to make an offer.

Then I asked one question: Do we want to be tied to that mortgage for the next several years, or do we want to keep our flexibility? We walked away.

We all know what happened next — the recession hit. Those same new buildings lost a huge chunk of their value. If we’d bought, we’d have been underwater, and we’d have spent the next decade working for the bank instead of building the business that actually became our future.

Appreciation felt guaranteed right up until it wasn’t. Check whether your own retirement plan is leaning on that same assumption, with nothing else underneath it. If a client showed you a plan with no lever besides “the market always goes up,” you’d flag it. Your plan deserves the same look.

If you can point to a second lever, like cash reserves, a life insurance policy’s cash value, a retirement account with a different growth engine, you’re fine. If real estate or stock market appreciation is the only one you can name, that’s the fix to make this year, not something to leave for the next hot market to paper over.

The house you sell this week probably won’t outrun inflation this year. That’s not a reason to apologize for the deal. It’s a reason to be the agent who can talk about it straight and whose own plan can survive a year like this one, too.