Have prices reverted back to historic norms yet?
Even after the 2.3% decrease in median home prices, the short answer is no. Consider the following from Chart of the Day, who note:
“For some perspective into the all-important US real estate market, today’s chart illustrates the US median price of a single-family home over the past 39 years. Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased – increased.
That brings us to today’s chart which illustrates how housing prices are currently 30% off their 2005 peak. In fact, a home buyer who bought the median priced single-family home at the 1979 peak has seen that home appreciate by a mere 4%. Not an impressive performance considering that three decades have passed. Over the past two months, single-family home prices have resumed their decline and remain (until proven otherwise) in an accelerated downtrend.”
I have annotated the COTD below, showing 3 distinct phases of the acceleration in price appreciation: From 1) During the Bull market 1985-1996; 2) Then following an advantageous tax change, ~1997 -2002. and then 3) After rates came down to 1% in 2003, housing went ballistic.
Courtesy of Chart of the Day