Real estate has historically appreciated at about an average of 4% per year, and that is just on the capital invested. Real Estate (Residential & Commercial), just like other investments, goes through cycles. These cycles go from a high point to a low point and then return again. The two variables are value (beginning and end) and the time it take to go through the cycle. One major plus in this economy is that attractive prices make for better cash flowing market rental income. Having weighed all of the economic factors like interest rates, money supply, net migration and job growth, the ultimate drivers are emotion & consumer confidence. If newspapers say "bubble"often enough, most investors will hunker down and avoid the pending crash. Real estate investment is about timing. There is a time to invest, a time to hold, a time to sell and a time gamble. Getting this right is 99% of the game. The good news is, unlike the stock market, a downturn in the real estate market is not a national phenomenon. It differentiates between markets, neighborhoods, properties and even the financing structure each and every home buyer or investor has in place.