Wednesday, May 10, 2006

Great Historical Housing Charts

Take a look at the site Is there a housing bubble?. Many great historical housing charts.

Check out the chart for San Deigo. Look at the inflation adjusted lines on the graph.

You can even download the data as excel spreadsheets. Super :-)


  1. It would be better if the starting points coincided and not the end points.

    And again OFHEO HPI is not the same as
    Median Home Price.

  2. It would make little sense to have the starting points coincide. One line is nominal dollars. The other is inflation-adjusted current dollars.

    HPI is an index that shows the change in prices over time. It is not denominated in dollars. What is your specific criticism of HPI? Do you have any suggestions for improving the graphs?

  3. 1975 to 2005 the median home also increased by 25% in square footage as well as massive improvements in energy efficiency and ammenities. Take that inflation adjusted red line and tilt it downward 20 degrees and you've got a more realitstic idea. Still a bubble but not a mania as is implied.

  4. YES!!

    It's back, by popular demand!!

    The most infintile, elementary-school-level bubblehead so-called analysis to date.


  5. Robert,
    It is perhaps misleading for me to suggest that trailing prices were the actual median prices at the time. I may have to clarify that. Instead, the charts show the median price of today's houses discounted by the HPI. According to OFHEO's description of the HPI:

    "The use of repeat transactions on the same physical property units helps to control for differences in the quality of the houses comprising the sample used for statistical estimation. For this reason the HPI is described as a 'constant quality' house price index."

    So, no slanting of the inflation-adjusted price line is needed.

    Infantile anonymous,
    Numerous top economists have looked at the recent housing price activity and concluded that a bubble exists. Looking at inflation-adjusted housing prices is just one of several ways of observing the same phenomenon. Since this has been primarily a housing bubble, I'd also like to look at changes in residential real estate prices versus changes in commercial real estate prices. I just need to find an equivalent commercial real estate index.

  6. Robert - why should improved energy efficiency of homes affect their inflation-adjusted price if that improved efficiency didn't come at any substantial incremental construction cost?

  7. I think Robert is saying that not only has size improved, but quality has improved as well.

  8. James,
    I think you got it. The way it is presented, gives an impression
    that the trailing prices were the actual medians.

    Secondly in 2005 the confirming loan limit was 359K. When actual
    medians in these super bubble markets are nearly twice that amount.
    It may not give an accurate adjustment of median home prices.

    I think you are right about the size increase of homes. But that
    is only for new homes I think. The existing homes (built before 1975)
    continue to be the same size they were built.
    So that effect is not as large as you are suggesting.

  9. The sellers are now bidding each other down in price!

    I had suggested a while ago on one of these housing blogs about seller bidding wars - the opposite of buyer bidding wars of the last couple of years.

    It seems like my suggestion was heard by some. I have found actual evidence of seller bidding wars, thanks to zip realty.

    Both are brand new condos in a NW DC building. "Never lived in" They both have the same exact square footage, and both including 1 parking spot. One's on the 7th floor, the other on the 2nd floor.

    1. MLS DC5584845 (2nd Floor)
    Original listing at $499,900
    Reduced to $474,900 on 4/24/06

    2. MLS DC5588332 (7th floor)
    Original listing at $499,777
    Reduced to $484,990 on 4/12/06
    Reduced to $473,900 on 5/8/06

    It's interesting to note that after #1 reduced their price, #2 reduced their price to EXACTLY $1000 less than #1 a couple weeks later.

    Listing #1 - it's your turn to counter bid against #2 now!

  10. oY from 4/05 to 4/06, DC inventory up 140%, avg price down 0.97%, median price up 2.55%, DOM up 47%, sales down 17.5%.

    Is April enough in Spring for all you trolls? Care to comment now on the robust housing market in DC after two straight months of avg price drops?

  11. In my seller bidding their prices DOWNWARDS against each other I failed to notice that #2 dropped their price first to an odd $484,900, then #1 DROPPED their price by exactly $10,000! Then #2 felt obligated to out-do #1, and DROPPED their price exactly by $1000. Something tells me this bidding war is going to continue!!

  12. Nikki,
    No. August is spring. And when August comes, October will be spring. We can never be proved wrong.

  13. "Is April enough in Spring for all you trolls? Care to comment now on the robust housing market in DC after two straight months of avg price drops? "

    And a median price increase? I say, w00t!!! yay median price increase!!!

  14. FINALLY!!
    I could've bought 3 years ago but prices were too high. Since then we've been bouncing from one rental to another and my wife has been bitch-biting me up and down. I need a 50% correction so I can buy and stop the sphincter-enlarging mud flaps pounding I'm taking at home.

    August sounds about right.

  15. what are the relevant stats in April vs. March?

  16. "FINALLY!!
    I could've bought 3 years ago but prices were too high. Since then we've been bouncing from one rental to another and my wife has been bitch-biting me up and down. I need a 50% correction so I can buy and stop the sphincter-enlarging mud flaps pounding I'm taking at home."

    Maybe you should get a job.

  17. Dude, I have a fucking job.

    I got the hot shit MS in CS when I was mid-thirties, taking on student loans to do it but figuring I'd be rolling in bling with 80k to start and 200k after two years. Little did I know that by the time I graduated a million Indians were doing my job in Bangalore for 56 cents an hour, leaving me with debt up to my eyebrows and reporting every morning for geeksploitation at the cube farm with the rest of the code monkeys for slave wages.

    Now I am a 40 y.o. bitter renter with a pissed off wife, some cats, alot of debt, no social security contributions and not much time to make my retirement nut.


  18. surfer - get a divorce. and a clearance. if your master's in CS can't compete with bangalore, you're doing something wrong.

  19. surfer - Try moving to a part of the country where they have a good tech job market and reasonable housing prices, such as Atlanta, Georgia. Also, Washington, DC has lots of good tech jobs, but you won't be able to afford a house. Where do you live now?

  20. Divorce? Nah. She's way younger than me and will prolly dump my ass when I'm old.

    I grew up here surfing on the central CA coast. Live in $anta Barbara now. I've looked at moving to Dry Heaves, NM and other places where I could find work and afford to buy a shitty little house. Can't bring myself to leave, I'd rather stay renting where I love living and complain about the unfairness of it all. Wallow in my own juices while the world passes me by, hoping that "reversion to the mean" and all those other theoretical phrases apply to real estate and will actually happen. I know one phrase that does have basis in reality - "soft landing". Just look at the last two+ years of San Diego, where all us bubble believers congregated and pointed to as the "canary in a coal mine". Now we all hope to hell what happened in SD does NOT happen anywhere else. Yet, what we do want to happen I have not seen anywhere in the country, nor have I seen a record of it EVER happening. We'd "settle" for a 1990 LA-style "crash" of 20% over many years, but the economic conditions that sparked that are nowhere on the horizon.

  21. Regardless of the controversy of those nominal vs. real price graphs, anybody with at least one brain cell can see there is a bubble of massive proportions.

    I'm not saying it's going to happen overnight...but it will happen.

  22. There's no need to train for a new career, unless Surfer is going to go back to school to study dentistry. Computer Science jobs still pay significantly-higher-than-average salaries. Engineering and CS are still the highest paying college majors.

    See the most lucrative college degrees:

    Try getting a job with a defense contractor so you can get a security clearance. An experienced CS guy with a security clearance is an employer's wet dream....and nobody from India will be able to take your job.

  23. Peer review time
    I have updated the main page of my housing bubble site to eliminate the suggestion that trailing prices were actual median values as of those dates. Instead, I say:

    "The charts on this site estimate the market value of today's median-priced house over a 30-year period."

    At the bottom of the page, I also give a detailed description of how the chart's values are calculated:

    "The trailing nominal prices are derived by taking the recent median house price reported by the National Association of Realtors and discounting it by the OFHEO House Price Index. The OFHEO HPI is a "constant quality" index, so even though houses are built larger today than they were 30 years ago, this graph automatically adjusts for this variation. The trailing real prices are then derived by adjusting the nominal prices by the CPI less shelter."

    I have not yet modified the individual metropolitan area web pages.

    Do these changes meet with everyone's approval, or do you have more constructive criticism?

  24. I find graphs with log scales are more realistic