How low can we go?

This guy says housing prices are falling to 1997 levels, “adjusted for inflation”. What would that look like, you ask? (Well, I asked, anyway). According to our government’s own Bureau of Labor Statistics inflation calculator, a $1,000,000 house in 1997 would, adjusted for inflation, cost $1,300,000 today. Sounds about right to me.

3 Comments

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3 responses to “How low can we go?

  1. FlyAngler

    Is Talbott a chicken little or genius?

    Talbott was opining about the real estate crash as far back as his book’s publication in early 2003. Does that make him very prescient or a perma-bear on real estate?

    I guess history vindicates him thus far but like many genetically bullish or bearish types, does his need to perpetuate his view require him to project it further and further rather than calling a bottom?

    http://www.amazon.com/Coming-Crash-Housing-Market-Investment/dp/007142220X

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/03/12/REGHHHM7MV1.DTL

    If interested, Talbott is also an Obamaphile:

    http://articles.latimes.com/2008/jul/16/entertainment/et-book16

    http://www.buzzflash.com/articles/contributors/1661

    • christopherfountain

      I don’t know, Fly – the blurb credits him with predicting the collapse of the Dot. com bubble but even this dummie called that four years out. My dog could have done the same thing except his only interest was ducks (and food). But 1997 prices? Some houses are already asking 1999, and if you throw in the inflation, they’re already there. Hmm.

  2. anonymous

    Prices went down ~40% in early ’90s…took about 5yrs to bottom…today’s economy is worse than early ’90s

    Another unknown is if a generation of young families (and first-time homebuyers) begins viewing RE as depreciating shelter…an expense, not an investment…influences prices willing to be paid if Ponzi (perhaps renamed “Bernie”) scheme is viewed as over (for at least a few yrs)….recall Nasdaq 5000….some 9 yrs ago….