Even at these valuations real property seems a good bet, particularly in certain areas of the country. Anyone who has bought in Tampa over the last several years is a bit shocked when they see the appreciation on their property and the rents tend to pace inflation as you say. It is a good hedge. I've poked around looking at small apartment buildings and some commercial properties. My neighbor picked up a nice medical building which is occupied. Kind of a narrow niche but he is doing well. Local values (Florida) might pull back a little over the summer as it becomes clearer that the state is going to experience some wild weather this summer. There has been two tornados a few miles from my shack in the last week. Just EF-0 (lol) but they tore up some homes pretty badly. After repeated destructive storms some newer Northeastern transplants might flee. I've seen it before as a repeating cycle.
Inflation rises significantly in May, up to 8.6% year over year The data arrives as the national average price of a gallon of gas reached $5. https://abcnews.go.com/Business/inflation-rises-significantly-86-year-year/story?id=85307385
Bought our place for low 700's in Nov of 2019. Exact same house down the block (but with no new roof, or AC units, etc) sold for 1.44M three weeks back.
As long as you have a regularly in demand area, rents might fall a little with economic setbacks but values will hold. If there are no small commercial properties, then condos in high rent areas are what I love. Thekey is to buy with as much cash as possible so I save up and try and go in every few years. Florida is hard as you can live way outside the cities now for work and there is just so much land and space and new builds in the Miami - Boca corridor. I am too lazy for that kind of research haha. New York is way overpriced and a shit hole. My favorite place right now is just across the bridge from D.C. in northern VA. No space, tight rental market and plenty of turnover.
Incomes are great in Northern Virginia too. The country is basically run by people who live there and some make very good money.
The number of millionaires in this region has grown so much in 10 years and it is more and more private sector. We have Boeing and Northrop Grummond (sp?) and Amazon here, plenty of law firms, consulting firms (PW and KPMG), now Raytheon and lots of IT. This has to be top 5 richest group of counties in the U.S. (Arlington, Alexandria, Fairfax, Loudon). Top schools in the state are all here which keeps property values pumped.
There is a pretty straightforward reason why all of the aforementioned groups are clustering around D.C.