The Rolex Market Index typically increases by about 4-5% per year.

But from 2020 to March 2022, the index rose by an incredible 76%.  Since then, however, the index has reversed course and has given up 2/3’s of those gains.

How does this apply to housing prices?

This same principal of “reversion to the mean” is also likely to occur with US and CA housing prices after prices peak out and start rolling over to the downside.

For those of you who are not familiar with this principle, I remind you what happened to home prices after the last housing bubble (2006 to 2012).