Long Run House Prices Revisited

The start of a new year is a great time to pause, consider the big picture, and predict the future. So it’s time for me to update a chart I first ran a while back on house prices.

This is adopted from Robert Shiller’s work. He chained together a collection of house price indexes covering different periods, ending with the Case-Shiller Index Composite from 1987 onwards, and then adjusted for inflation.

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Was the Last Decade Lost?

This is the first post of the new decade. I can’t be sure, but I think that the recent two digit change in the Great Odometer has been a little underplayed this time around, relative to the buzz from, say, 1990.

(Fussbudgets who insist that decades start with years that end in 1 instead of 0 need to stop taking themselves so seriously. Yes, the conventional definition is not entirely logical. Does it also bother you that fire alarms go "off" when they operate?)

Part of the under-buzz may be due to the fact that we never really got around to naming the decade that just ended. In fact, a large portion of what media coverage the decade got focused on this oversight. I have no helpful suggestions. Personally, I will always think of the 2000-09 period as the Really Fast Decade. Seriously, it feels like it lasted ten months, at most.

For investors and savers, one obvious nominee is The Lost Decade. My main objection to this is that the name is already taken, referring to the 1990s in Japan, where two generations of postwar economic expansion came to a sudden and bewildering halt on or about January 1, 1990. Compared to that, our last ten years wasn’t really all that lost. The Misplaced Decade?

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