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Single Family Home Prices, Inflation Adj (1970-2009)

Posted By Barry Ritholtz On September 26, 2009 @ 2:30 pm In Real Estate | Comments Disabled

Have prices reverted back to historic norms yet?

Even after the 2.3% decrease in median home prices, the short answer is no. Consider the following from Chart of the Day [1], who note:

“For some perspective into the all-important US real estate market, today’s chart illustrates the US median price of a single-family home over the past 39 years. Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased – increased.

That brings us to today’s chart which illustrates how housing prices are currently 30% off their 2005 peak. In fact, a home buyer who bought the median priced single-family home at the 1979 peak has seen that home appreciate by a mere 4%. Not an impressive performance considering that three decades have passed. Over the past two months, single-family home prices have resumed their decline and remain (until proven otherwise) in an accelerated downtrend.”

I have annotated the COTD below, showing 3 distinct phases of the acceleration in price appreciation: From 1) During the Bull market 1985-1996; 2) Then following an advantageous tax change, ~1997 -2002. and then 3) After rates came down to 1% in 2003, housing went ballistic.

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20090925 [2]
Courtesy of Chart of the Day [3]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2009/09/single-family-home-prices-inflation-adjusted/

URLs in this post:

[1] Chart of the Day: http://www.chartoftheday.com/

[2] Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/09/200909251.gif

[3] Chart of the Day: http://www.chartoftheday.com/20090925.htm?A

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