People don't understand inflation, even some investors

[Marcus Auerbach]

I heard this notion 3 times in the last couple days: going to wait and safe my money until inflation is over and prices come down again, one of them a fellow investor!! 

It seems to me that people think inflation is basically price increases and when inflation comes down to again, the price increases will basically reverse to where they were before, because inflation is just temporary he said. 

I can see how the evening news are pushing this believe when they talk abour rising prices, instead of the devaluation of the currency, which is permanent. We would need negative inflation to go back to pre-inflation price levels.

Looking at a long term inflation chart and the time periods it took for inflation to rise, peak and fall I am thinking this could take a while - maybe another year or two to reach peak and then start to reverse. Home prices will probably do the same, just because the dollar bills are getting smaller. 

[Jay Hinrichs]

Quote from @Karl B.:

Property prices will drop in some markets due to a rising interest rate (which results in lower demand due to a higher monthly mortgage payment) but higher prices are here to stay when it comes to items like windows, tradespeople, etc - labor intensive products and work as employees aren't going to accept a lower wage after receiving wage increases due to higher inflation. 

on the dimensional lumber side of housing components..  One of my floor plans we are building in Oregon in 2020 was about 45k lumber pack and truss's  then shot up to 65k when did 3 more of that plan  ( 2200 sq ft) high ceilings 10 to 12 feet so lots of lumber for the sq ft.  but then in July of 2021 I priced it again and it was 110k.. I said nope not going to start that house.. we waiting 3 months and it went back down to 85k.. and I just built two more of those last month we started and it was 85k again.. so it can peak and come down in a short period of time.. but admittedly this is lumber .

the first one I built of this plan sold for 620k.. then it went up to 660k then 700k  all within one year.. and this year I sold the exact same plan for 790k and have one more that i have priced at 799k.  So even though components rose prices kept up even better.. so will see how it all shakes out..  And of course this is ground up new construction.