Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Are real estate prices memory-less?
Housing prices are set by different criteria. It can become memoryless the same as the stock if the criteria used to set its price in the past is no longer valid. For example, take Phoenix or Las Vegas - in the past these were considered attractive investments because of the economical growth and the climate of the area. While the climate hasn't changed, the economical growth stopped not only there but also in the places where people buying the houses lived (which is all over the world really). What happened to the housing market? Dropped sharply and stays flat for several years now at the bottom. So it doesn't really matter if the house was worth $300K in Phoenix 5 years ago, you can only sell it now for ~$50K, and that's about it. The prices have been flat low for several years and the house price was $50K, but does it mean its going to stay so? No, once economy gears up, the prices will go up as well. So its not exactly memory-less, but the stocks are not memory-less as well. There is correlation between the past and the future performance. If the environment conditions are similar - the performance is likely to be similar. For stocks however there's much more environment conditions than the housing market and its much harder to predict them. But even with the housing people were burnt a lot on the misconception that the past performance correlates to the future. It doesn't necessarily.