Learn from Financial History

Financial history shows that significant real estate drops have occurred in modern financial crises, averaging over 30%. A paper by professors Reinhardt and Rogoff highlighted five major financial crises, emphasizing the importance of learning from historical events to understand that extreme events like major real estate drops are not just theoretical possibilities but have happened in recent decades. Home prices typically move by around four or five percent annually, but extreme shifts of 35% to 40% are also within the realm of possibility.