History of Real Housing Prices

Wow!  This chart reprinted by The Atlantic brings flashbacks.

We recall showing the Robert Schiller chart to many of our friends warning of a massive bubble and potential economic collapse.  They wouldn’t hear any of it.  We luckily sold our ocean view house in late 2004/early 2005 and have been a happy renter every since.   Still too much hopium for a rebound in housing prices for a bottom, in our opinion.

The demand for housing is based primarily on the cost of the monthly mortgage payment, but interest rates have no where to go but up over the long term.   What does that say about the secular direction of home prices?   The boom that began in the early 1980’s coincided with interest rates in the high teens.

Maybe the Fed can generate another housing bubble, but the value of housing in a mature market should move with bond prices unless a large dislocation takes place such as the one we’re currently experiencing.

Best to focus on wealth creation by becoming more productive rather than levering up on real estate and hope it moves your way.   In today’s world that means reinventing yourself and becoming an entrepreneur. Much easier said than done, but what choice do most have?

(click here if chart is not observable)

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3 Responses to History of Real Housing Prices

  1. Pingback: History of Real Housing Prices | Forex news

  2. Mary says:

    I just do not believe the true picture of the economy is being shown on the news sites. The so called drive by medias (as Rush call them) paints a rosy outlook by all their expert writers. I personally think they are all talking out of their butts. If there is a recovery, where is it? It does not take a “Benny, the Brain”to see where “we” are headed. ETB cards are now being loaded with extra money to spend by these reciptants, It is called supplemental relief– Think that was ever written about? NO- you have to really dig to find it. It is-to me- distributing the wealth in disguise. What about the student loan money? This money is being used for cars and things for themselves. Thought it was for schoo only – These people get help for rent and food from the government separate. Judge Judy can really trap them to admitting this.-Anyway-everyone should check it.
    The country is now in the cesspool of fraud, theft, lying, cheating, just a touch of the iceberg. just wish G-D would show his authority NOW, but we will have to wait until it is HIS time. Maranatha.

  3. JJK says:

    If you’re quoting Rush Limbaugh, there’s no hope for you, Seriously.

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