Is there a direct relationship between the U.S. Real Estate market and the strength of the Dollar?

I'm new to real estate, and am thinking of getting into it more, but I still don't have any formal background. I was wondering if there's a well known direct relationship between real estate prices (both residential and commercial) and the strenght of the dollar versus foreign currency.

It would seem that as the dollar weakens, property values should rise. A weakening dollar basically causes inflation relative to other currencies. In order to keep the real value of property in the US steady (it should vary independently from US currency), housing prices should rise (in dollars).

Is my thinking above true? Or do many of the same factors that affect the dollar on a global basis also get applied to investment in US property?

Anyone with real estate or macroeconomic experience have knowledge about this? I'll definitely vote and give points for the best answer, and sources or qualifications are appreciated.

My thinking would be the opposite. As the dollar weakens, interest rates spike. Interest rates have an indirect relationship with property values, so property values fall during periods of high federal funds rates. Look back to late 1970's, early 1980's when the real estate market was at its worst - their were astronomical interest rates. Now consider 2005, when interest rates were at their lowest, real estate values soared. Now that rates are increasing once again, property values are beginning to deflate.

A lot depends on how much you'll be financing and also what type of real estate investments you'll be making. Many people that get involved in real estate get themselves overextended during the times of high property values, and lose everything when those values fall. Be careful, especially right now.

i think so

Probably...a weaker dollar means that more foreigners can buy property here...or the other way around. I forget.

Indirectly. The US real estate market is heavily influenced by mortgage interest rates. Those interest rates are partially effected by the strength of the US dollar.

Well as this is part of the economy yes as a stronger economy means more value to your money in the market.

Well Thomas Jefferson said there was.

I agree with you. Rising inflation is the root reason why the Fed raises interest rates which should increase house values. In the 80's when interest rates skyrocketed and dollar was weak no one could afford to buy a house which created a higher demand for rental properties. A higher demand creates higher rents which over time will produce higher prices when these same properties are for sale due to higher cap rates (this is true for both commercial and residential). I believe the recent decrease in home values in the north east was due to a market adjustment from prices simply being too inflated in the first place. But as to the future you (and me) are right in our thinking. So, if you are looking to buy investment property it is better to plan on being a landlord for awhile rather than a house flipper.