The S&P/Case-Shiller U.S. National Home Price Index posts a -4.5% annual decline in the third quarter of 2007. That's a record drop. Here's the link: Download file
I heard your commentary this morning, that cap gains on real estate shouldn't have any favorable tax benefits. But please, first, address the perennial complaint that capital gains do not account for inflation. If I buy a home with cash, sit for ten years and the home price rises only a few percent per year (with inflation at about equivalent rates), then when I sell the government effectively just steals money. Contrast this with equity gains, typically with a short-term horizon, where the same policy would have less an effect.
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