Richard Green is a professor in the Sol Price School of Public Policy and the Marshall School of Business at the University of Southern California.
This blog will feature commentary on the current state of housing, commercial real estate, mortgage finance, and urban development around the world. It may also at times have ruminations about graduate business education.
So nominal housing prices have risen at an annualized 3.3% rate since 1987. And the CPI has increased at an annualized rate of 3.1% between August 1987 and August 2008. So over that 21-year period, real housing prices have increased by 4.3%. In total. Or...real housing prices are (roughly) unchanged over the past 21 years. So maybe the current level of housing prices isn't all that far out of line? Or, if they are way too high, then they were also way too high in 1987?
Fears have grown for house owners and estate agent as house prices are again falling. Suring August we have seem the lowest slump of new mortgages for quite a while. Estate agents have reported that even potential buyers are performing a wait and see procedure as the government to announce its intentions over stamp duty after intense speculation that it could be scrapped for a time to boost the housing market.Ultimatley seen a 15% slump in prices this year and it is set to continue with a 12% slump for next year.
So nominal housing prices have risen at an annualized 3.3% rate since 1987. And the CPI has increased at an annualized rate of 3.1% between August 1987 and August 2008. So over that 21-year period, real housing prices have increased by 4.3%. In total. Or...real housing prices are (roughly) unchanged over the past 21 years. So maybe the current level of housing prices isn't all that far out of line? Or, if they are way too high, then they were also way too high in 1987?
ReplyDeleteFears have grown for house owners and estate agent as house prices are again falling. Suring August we have seem the lowest slump of new mortgages for quite a while. Estate agents have reported that even potential buyers are performing a wait and see procedure as the government to announce its intentions over stamp duty after intense speculation that it could be scrapped for a time to boost the housing market.Ultimatley seen a 15% slump in prices this year and it is set to continue with a 12% slump for next year.
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