Corrected for Inflation, US Home Prices Did Not Change For Nearly 100 Years Before the Mid 90’s
The Shiller index is a model for tracking the price of homes. The index uses a proprietary method for evaluating repeat sales to track national home price trends over time.
The chart below shows the Schiller national benchmark indexed to 100 in the year 1890. Denver is indexed to match the US in 1996. The chart should not be viewed as an absolute. Instead, it is a relative indication of price trends with time nationwide.
The data is corrected for inflation. It is very interesting to note that except for the dropout during the great depression, the average price of homes did not change significantly in the U.S. for nearly 100 years. Then in the mid 1990’s prices started to take off when money was cheap and easy to get.
Fast forward a few years and here we are. What goes up must come down—markets must normalize eventually. Denver’s price run up was less extreme than the US average by nearly 20%. Even still, judging from the chart and the general trend across time there is still a ways to go before the market levels off again. This is a great example of the old adage “a picture is worth a thousand words.”
Data Source: Your Castle Real Estate, MetroList, Robert Schiller, Bureau of Labor Statistics
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Interesting stuff. And a touch depressing.