{"id":880,"count":2,"description":"\r\n\r\nJump to: \r\nWhat is inflation?<\/a>\r\nHow do you invest to protect against inflation? \u201cInflation Hedge\u201d<\/a>\r\nWhat is inflation in real estate?<\/a>\r\n\r\n\r\n\r\nWhat is inflation?\r\n\r\nInflation refers to the rise of costs of living (prices of goods and services) which causes a fall in the purchasing power of currency (as the same item can cost more money, over time). Inflation is expressed as a rate \u2013 \u201crate of inflation.\u201d\r\nGenerally measured relative to a \u201cconsumer price index\u201d, which tracks the prices of core goods and services over time. This will, in turn, track the value of earnings over time.\r\nIt is generally considered that inflation is one of the main reasons for making investments \u2013 as money itself may decrease in value over time, investing it in other assets that may be less affected by devaluation is a way to try to ensure that the value of earnings endures over time.\r\n\r\n\r\n\r\n\r\n\r\nHow do you invest to protect against inflation? \u201cInflation Hedge\u201d\r\n\r\n\r\nIt is important to note that a common misconception is that inflation causes all prices to rise uniformly, which is not true. For example, during an increasing inflation rate, the prices of some commodities may rise continuously (such as food stuffs and technology consumer goods) while the prices of other commodities fluctuate (the price of fuel can rise and fall steeply, rather regularly).\r\nSuch differences in effects of inflation is why most financial experts recommend that investors do not focus on one specific type of asset, but rather try to invest in diverse assets (\u201cbuild a diverse investment portfolio\u201d) in order to minimize investment risks.\r\n\r\n\r\n\r\n\r\n\r\nWhat is inflation in real estate?\r\n\r\n\r\nWhen inflation decreases purchasing power, this usually affects the cost of credit, in that interest rates tend to go up. As a consequence, buyers may be less inclined to take out a loan for real estate purchases. In turn, the real estate market reacts:\r\n- What may be considered a natural reaction is to lower prices of real estate, so that sales do not lag. This does tend to happen in the case of smaller developers, in smaller markets, as these developers, much like the buyers, are somewhat dependent on loans.\r\n- However, developers who operate larger businesses and have stability in the industry are less dependent on loans and can afford to not lower their prices, instead opt to wait out the \u201cinflation bubble\u201d.\r\nInflation-affected buyers\/renters can also affect the real estate market.\r\nFor example, an investor may simply opt for a smaller loan instead of no loan, and therefore invest in lower-priced properties. This context will temporarily lead to more investments in Class B and Class C commercial real estate properties, instead of Class A.\r\n\r\n\r\n\r\n\r\nYou might also be interested in:\r\n\r\nWhat are the types of listing agreement?<\/a>\r\nWhat are variable annuities?<\/a>\r\nWhat does a real estate agent do? Listing Agent vs. Buyer\u2019s Agent<\/a>\r\n\r\n\r\n\r\n\r\n\r\n\r\nSearch other terms\r\n\r\n\r\nA<\/a>\r\nB<\/a>\r\nC<\/a>\r\nD<\/a>\r\n\r\n\r\nE<\/a>\r\nF<\/a>\r\nG<\/a>\r\nH<\/a>\r\n\r\n\r\nI<\/a>\r\nJ<\/a>\r\nK<\/a>\r\nL<\/a>\r\n\r\n\r\nM<\/a>\r\nN<\/a>\r\nO<\/a>\r\nP<\/a>\r\n\r\n\r\nQ<\/a>\r\nR<\/a>\r\nS<\/a>\r\nT<\/a>\r\n\r\n\r\nU<\/a>\r\nV<\/a>\r\nW<\/a>\r\nX<\/a>\r\n\r\n\r\nY<\/a>\r\nZ<\/a>\r\n\r\n\r\n\r\n\r\n\r\nPopular terms\r\n\r\n\r\n\r\n\r\nAmortization<\/a>\r\n\r\n\r\nEquity <\/a>\r\n\r\n\r\nNotary Public <\/a>\r\n\r\n\r\nProgression\/Regression<\/a>\r\n\r\n\r\nAcquisition <\/a>\r\n\r\n\r\nAnnuity <\/a>\r\n\r\n\r\nAsset <\/a>\r\n \r\n \r\n Fiduciary <\/a>\r\n\r\n \r\n Inflation <\/a>\r\n\r\n \r\n Contingency <\/a>\r\n\r\n \r\n Escrow<\/a>\r\n\r\n \r\n Power of attorney <\/a>\r\n\r\n \r\n Real Estate Agent <\/a>\r\n\r\n \r\n Eminent Domain <\/a>\r\n\r\n \r\n Liability <\/a>\r\n\r\n \r\n Statute of Limitations<\/a>\r\n\r\n \r\n Valid <\/a>\r\n\r\n \r\n Variance<\/a>\r\n\r\n \r\n Contiguous <\/a>\r\n\r\n \r\n Deficit<\/a>\r\n\r\n\r\n\r\n\r\n","link":"https:\/\/www.commercialcafe.com\/blog\/tag\/cre-term-inflation\/","name":"Inflation","slug":"cre-term-inflation","taxonomy":"post_tag","meta":[],"yoast_head":"\nWhat is Inflation? - Commercial Real Estate<\/title>\n<meta name=\"description\" content=\"Inflation refers to the rise of costs of living (prices of goods and services) which causes a fall in the purchasing power of currency (as the same item can cost more money, over time). Inflation is expressed as a rate \u2013 \u201crate of inflation.\u201d\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialcafe.com\/blog\/tag\/cre-term-inflation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Inflation Archives\" \/>\n<meta property=\"og:description\" content=\"Inflation refers to the rise of costs of living (prices of goods and services) which causes a fall in the purchasing power of currency (as the same item can cost more money, over time). 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Inflation is expressed as a rate \u2013 \u201crate of inflation.\u201d","og_url":"https:\/\/www.commercialcafe.com\/blog\/tag\/cre-term-inflation\/","og_site_name":"CommercialCafe","twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"CollectionPage","@id":"https:\/\/www.commercialcafe.com\/blog\/tag\/cre-term-inflation\/","url":"https:\/\/www.commercialcafe.com\/blog\/tag\/cre-term-inflation\/","name":"What is Inflation? - Commercial Real Estate","isPartOf":{"@id":"https:\/\/www.commercialcafe.com\/blog\/#website"},"description":"Inflation refers to the rise of costs of living (prices of goods and services) which causes a fall in the purchasing power of currency (as the same item can cost more money, over time). 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