More good news today: the Case Shiller index of home prices continues to fall. This chart shows the inflation-adjusted value of the index according to my calculations, plus a projection for where the year-end value will be. So far, prices in real terms are down by 27% from their peak. By year end, prices could be down by 30%. That might be enough to call a bottom, but perhaps they fall a bit more; in any event we have seen a substantial correction in prices and a consequent significant improvement in affordability. I have a more detailed discussion of this subject here that points out the severe lagging nature of this index among other things.
Tuesday, November 25, 2008
Housing prices continue to fall
More good news today: the Case Shiller index of home prices continues to fall. This chart shows the inflation-adjusted value of the index according to my calculations, plus a projection for where the year-end value will be. So far, prices in real terms are down by 27% from their peak. By year end, prices could be down by 30%. That might be enough to call a bottom, but perhaps they fall a bit more; in any event we have seen a substantial correction in prices and a consequent significant improvement in affordability. I have a more detailed discussion of this subject here that points out the severe lagging nature of this index among other things.
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