Friday, June 24, 2011

More housing graphs

Stephen Gordon, of the Worthwhile Canadian Initiative blog, has some interesting housing graphs. U.S. inflation-adjusted per capita housing assets are back to 2000 levels:

U.S. inflation-adjusted per capita housing equity is through the floor:

Stephen Gordon writes:
I was able to check the last time the real, per capita value of US housing equity was at its current level. Even after looking at all of these graphs, the answer astonished me: 1978. Nineteen seventy-freaking-eight.
While the rise and fall is obvious from these two graphs, the thing I notice is that they were both basically flat prior to 1998. In fact, that's what Robert Shiller's research says: Inflation-adjusted housing values tend to be flat over time. The only way per capita real housing assets should rise is if people build larger houses.


  1. Interesting to see the Canadian (per capita assets) housing is still rising.  I would have thought the 2008 crisis would have done far more to knock the rate of increase alot more than it did.  As it stands, they are now at or near all time highs. 

    The people who I really feel sorry for are the ones who first identified the runup as being "unsustainable" back in the early years.  As it stands, when the index got to 130 in 2005, a reasonable person could conclude, "im gonna sit this one out until the index comes back down".

    I do think it will come back down at some point.  The problem though is it is now close to 180.  Thus, even if it drops a monumental 40 points, you will have refused to buy at 130, only to buy years later at 140.  In real terms, it may have made sense to wait, but its always hard to pay more nominal dollars than you would have had to in the first place.

  2. Really incredible how well Canada is doing compared to the U.S.  But then again, they do have an adult government!

  3. Yes, the inflation will continue to rise and fall. But is it really a solution to build larger houses.