- May 19, 2009
- Reaction score
- Redneck Riviera
- Political Leaning
Home Prices May Drop Another 25% - Business - The Atlantic
This is a pretty fascinating picture. First, it shows just how incredibly absurd the housing boom was. Beginning in the 1940s, inflation-adjusted homes prices have settled around the 110 value according to the Case-Shiller index. Yet, the index value exceeded 200 in 2006. Prices began a descent when housing collapsed, but as of May the index remained well above the natural value of 110.
Eyeing the chart, the value looks to have hit around 147 in May. For it to drop back down to 110, home prices would have to decline another 25%. That's still a pretty long way to fall.
I knew home prices had gone way, way up in our area right after we bought our house in 1999, but I had no idea how much they'd really zoomed up because all of our equity was on paper. Amazing, really. And, in comparison to other booms, it explains why they fell so far, so fast.