Expansion VS Contraction
Expansion shows us those properties that
are in an affected areas loose much greater amounts of value during recessionary
periods. And in many smaller recessions un-affected areas may not suffer at
all. (Affected areas are those that are within a median rental range and
typically well below the median home price, they are areas that greater
unemployment, population changes, and foreclosures greatly affect the property
values)
Contraction is the opposite effect. The
properties that were over influenced are now in demand (due to
affordability) when a market recovers. Therefore in order to return to
a typical 4%-5% overall long term appreciation they must
appreciate quicker in a shorter period of time than un-affected
properties.