Tuesday, May 26, 2009

The housing market - some sobering facts

The S&P/Case-Schiller housing data for Q1-09 was released today.
The US National Home Price Index was down 19% year-over-year. But beyond that here are a few items worth noting:
  • On an inflation adjusted basis (chart below) the index is down 36% from the peak.
  • To get to the last inflation adjusted bottom in housing prices, we have another 16% to go.
  • The previous correction that started in the late 80s and bottomed in the mid 90s was 16% (20% milder than the current correction thus far).
  • The previous correction took 7 years to hit bottom; we are 3 years into the current correction.
  • If you bought a house at the last peak (end of 1989), it took you over 10 years to get your money back (and you would be just above break even now - 20 years later).
  • On average if you bought a house any time after 2000, you've lost money (adjusted for inflation).

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