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36 Comments on The 15-Year Spring Market Chart. What does it tell you?
Excellent! I am bookmarking so that I can find it easily. (I love Charlie Dresen's photos as well.)
Greg, they say a picture is worth a thousand words, but I think your awesome graph is worth a lot more! Kinda puts things into a better perspective.
Hey Charlie, great chart.
Did you notice that the blue line (non-adjusted prices) moved upward after 1940 and again after 1970? Do you know what happened in 1938 and 1968? Fannie Mae was created in '38 and it went public in '68.
Many people talk about throwing Fannie and Freddie away. I agree with breaking them down and starting over, but just build what we used to have before 1996 and we are in great shape.
Greg - I think Charlie's comment illustrates your point well. I also agree with Joan that this should be sent to the media.
Great Info! Thanks for sharing.
Greg, this is an excellent graph to share with all of our clients. Charlie's additions are also of value!
Wow! That looks like about only a 20-25% drop in house prices. In central florida, we should be so blessed. New homes bought in 2005-2006 here that sold for $220-240K, can and are being bought for $95-125. I'm not proud of it but I've sold nothing wrong with, about 1,000+ square ft. homes for $25-30k. - Granted they were shortsales but still decent, liveable housing not needing repairs. I guess I'm just saying that not every area of the country comes close to the 20-25% drop statistic. To hear the newspapers tell it, some areas were barely affected at all so I guess our part of the country is making up for it.
Retirees... COME ON DOWN! I have a deal for you! The one time tax exclusion is useful here since it's almost impossible to pay as much or more for your home here as your previous home elsewhere.
Greg great information and I will be sharing it with my mortgage clients. Can you share the source of the chart's information?
I did not know that Greg. Very telling.
Greg, great post filled with very good information. i am going to share it with my clients and lenders.
Thanks for sharing! I only wish it had volume and stochastics, MacD, williams percent ... kidding, I used to do stock charts. this is great information, and appears we are trying to put in a bottom.
upon closer look, the seasonal highs are lower, and lows are lower, and below the advancing trendline, potentially indicating the possiblility of a new low.
However there is not enough information here, and statistical volume and other criteria to determine the likelihood of either a higher high, or a lower low.
with that I'll say two things: "its the economy stupid" jobs and economy will be a big factor.
and... finally the thing we all know: Real estate is LCOAL.
thanks for the chart!
Very interesting post, Greg. It is a very useful tool; we must read it, understand it, be able to explain it to our fellow agents in the office.
Great chart -- and also thanks to the commenter who posted his own chart and red line analysis. It really puts it into perspective
I just saw this exact same thing & didn't come up with these conclusions - duh! on my part. Actually I was working on a post about spring market blips & is the market still working the same way as it did before the bubble?
Very informative post Greg. I'm going to include this in my presentation to buyers and sellers.
Greg,
Excellent post! It really helps put things in perspective. It is so easy to lose sight of the big picture.
Thanks for sharing!
Of course those that 'cashed out' their equity during the bubble had equity issues too.
This is an interesting chart and people will read into it want they wish to do. In general, your theory lies upon a concept called reversion to the mean; but I would like to point out that we are having lower highs over the last three years and that could mean we are going to get another leg down. Charts are interesting but you must be open to various outcomes; not just the ones that you wish.
The charts tell me that we are about where we should be now. Our local market in the Dallas Suburbs is very different than many places in the US and this year has seen a big increase in sales over the last 3 months. I cannot remember the exact numbers but I hear agents in our office saying its the best market they have seen since 2007.
Wow, great post and responses. These charts really give a different view of market beyond our local market.
The “15-Year Spring Market Chart” shows prices rising in the spring, and then flattening out and dropping slightly in the fall between 1996 and 2001. Then in the fall of 2002 the pattern changes and there is a fall price increase. This is at about $150,000. Is this change in pattern the real start of the bubble ?
The size of the spring price increases grows from that point on until spring of 2005. Then prices are flat, trending at $220,000, until the fall of 2007 when they start dropping. After the price decline prices are trending around $180,000 from 2008 until the present. Is $180,000 the new “trendline” or “trough” or do we still have another 16% drop to go to return to the pre-bubble, $150,000 trough ?
What do prices look like in the 15-Year Spring Market Chart when adjusted for inflation ?
Charlie’s inflation adjusted “US Housing Prices from 1890 – 2008” shows three “trendlines” or “troughs.” The first is at $125,000 from 1890 to 1917. Then there is a price drop and the new trough is at $100,000 until 1944. Then prices increase and the new trough is at $150,000 from 1944 until about 2002 .
The new troughs seem to start because of world-wide fundamental societal shifts. The $125,000 trough ends at World War I, when it drops to $100,000. This $100,000 trough ends at the conclusion of World War II, and the new trough is at $150,000.
World War I and the depression saw less demand and less ability to purchase housing. The end of World War II saw increased demand and increased ability to purchase housing. What about now ? Surely there has been a change in demand and a change in ability to purchase housing.
Has there truly been a world-wide societal change sufficient to sustain a new trough at $180,000 ? Or are we going back to $150,000 or even some price trough between these two ?
Since 1990 we have seen the breakup of the USSR, the reunification of Germany, the formation of the European Union and the new Euro currency, the 9/11/2001 terrorist attack on the World Trade towers, and US wars and long-term military presence in the middle east. Pretty big changes. Perhaps the bubble (actually multiple bubbles in countries around the world) was just an over enthusiastic reaction to these fundamental world-wide societal changes ? It is certain that we are going to establish a new real estate price trough – the question remains at what price ?
Mel Capps