What goes up must come down

| November 26, 2008

Here’s a graph of US housing prices since 1975, both the stated prices and the same prices adjusted for inflation:

As you can see, once you adjust for inflation, housing prices have peaked and then fallen three times in the last 30 years.

I remember looking at a $35,000 house in the semi-rural area near Cherry Hill, New Jersey — five bedrooms plus a freestanding garage/workshop — in 1979. I didn’t buy it (and didn’t accept the job at RCA) because winter heating oil costs were around $300/month at a time when I was only grossing $1300/month. Oh, and inflation was moving towards double-digit values, as were mortgage interest rates. I remember all that quite well, which is why I’m not panicking about the current financial mess just yet.  ..bruce w..

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Category: Credit Backlash, Economics, Main, Recession Watch

About the Author ()

Webster is Principal and Founder at Bruce F. Webster & Associates, as well as an Adjunct Professor of Computer Science at Brigham Young University. He works with organizations to help them with troubled or failed information technology (IT) projects. He has also worked in several dozen legal cases as a consultant and as a testifying expert, both in the United States and Japan. He can be reached at bwebster@bfwa.com, or you can follow him on Twitter as @bfwebster.

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