The Economist took a look at Standard & Poor’s housing data and concluded that there probably isn’t a housing bubble at the moment. And when you see the charts you can see why.
For example, if you start at the end of 1987 (giving it a value of "100"), here is what real house prices look like.
As we’ve mentioned before, when you adjust for inflation, home prices tend to stay about the same — at least that’s what Shiller found when he looked back to the late 1800s. If you were to extend this graph back, you’d see prices usually bounced around near that 100 mark.
So now we’re back there, after enduring the bubble of 2000 to 2008. Ergo, we’re not in a bubble.
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