10 years...no gain in home prices

 

By Les Christie, staff writerJanuary 1, 2010: 6:12 PM ET

NEW YORK (CNNMoney.com) -- Taking into account inflation, home prices are actually lower than they were 10 years ago....

The median home price in November 1999 was $137,600, NAR said, and by November 2009 it had risen 25% to $172,600. But with cumulative effect of inflation, prices are actually 3% lower in real terms.

The good news is that wages have risen in the past 10 years, so homes are now affordable than they had been....

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From this JUNK commercial propaganda, here arise at least 2 questions deserve our furhter examination:

1. It is one of the conventional wisdom: real estate is the BEST hedge vehicle against INFLATION.  Is it no longer a truth?  If in fact its real "price" is decreased 3%, do you think anyone should buy real estate?  As a realtor or agent with conscience, you won't recommend others to buy them and should advise everyone to avoid buying a property like plague, right or wrong?

Okay, let's assume NAR is correct in stating "housing price is cheaper."  If it is the case, then why we have to buy?  It is a bad investment compared to other investment.  Does here NAR impliedly suggest us not to do it? Ouch! good help from NAR, Benanke should say. 

Furthermore, there are so many angles for us to "touch" an elephant.  Value or Price is a relative noun, not an absolute term.  From which base NAR claimed housing price is less? Enclosed herewith for reference is an article doing the opposite in terms of real household income to claim it is too expensive:

Buying a Home in America today is Expensive Thanks to the Banking Sector: Examining Income and Home Prices from 1950 to the Present. Can Home Prices Fall Another 38 Percent?

2. What's "our American value of family" as claimed by GWB to protect? Marriage is a promise broken.  From the figures provided above, you can get an idea of the social reality that it is norm for an average JOE to stay away from getting married, at least to avoid so-called "marriage penalty," right or wrong?
 
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