Real Estate Prices Corrected to What Year?

By
David
– February 18, 2011Posted in: Real Estate

Is now a good time to buy real estate?

That’s a very popular question now because the real estate bubble has collapsed and prices have fallen significantly in most markets.

One way to think about housing prices is to compare today’s prices to the point in time in the past when they were at the same price.

CalculatedRisk has a good chart explaining the price of single family homes and what prior year prices have corrected to.

Real Estate Price Corrected to What Year Case-Shiller 2010-10

Real Estate Price Corrected to What Year Case-Shiller 2010-10

If you are in the market to buy real estate or contemplating doing so, then consider the chart above and what it means. In many markets real estate prices have lost a decade’s worth of gains.

Home prices are subject to the forces of supply and demand as in all markets. During the real estate boom, prices rose because unprecedented demand was fed by low interest rates, easy loan qualifications, and hopes for capital gains. The housing bust was fed by tight lending requirements, a large inventory of distressed homes for sale, and declining demand to own or hold real estate.

The above data makes it feel as though we are back where we started, doesn’t it?

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