This chart reminds me of the crash in real estate prices in the late sixties when REIT (real estate investment trust) stock prices dropped to pretty much worthless. I was still in high school, but the Courts got involved in the loss of value in trust portfolios, so I was looking at those in 1974 in my accounts. I would think that today’s national drop in home prices emulate the drop in the late sixties to some degree.
I do recall in recent years warning people not to buy into REITs, but must admit I felt a bit “old-fashioned” at the time. Once you see those losses, you don’t forgive or forget, somewhat like people who lived through the Depression.
This post is supplemental to last night’s post and as a result of the comments that follow in that post. The source of this info is at the end of last night’s post for those who want to look at the detail.
U.S. YOY % Home Price Changes
An interesting overlay would be household income (not adjusted for inflation, as I assume house prices are not either).
From the black line on the chart, one might draw the conclusion that continually rising home prices are the norm, and the past 2 years are the anomaly.
I suspect you would see a rise in HH income roughly paralleling the rise in home prices up until about 2000.
Income is 3.26 times 1975 levels and Home Prices are 5.72 times 1975 levels. Let me see when the last matchup of income increase and home price increases was.