Home Prices

As the chart shows, even with the collapse we have experienced since 2005, we are still at levels that look outrageously high given a normal progression. If we were to return to something like 2001-2002 prices, we would still have a LONG way down to go. The early 2000’s bubble corresponds almost exactly with the low rates from the Fed that were in place to combat the dot com collapse and the EnronĀ scandal.

Add to our still-inflated prices a falling birth rate, retiring baby boomers and people with one kid or less who don’t exactly need 4,000 square feet and massive kitchens because they never eat at home and I think that we will see malaise in housing for at least another decade.

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