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The average home price going up more than 80% from 2000 to 2006 is extreme. The average home price going up 100% from 2000 to 2018 isn't that crazy. Maybe price
by phyller 8y ago
The average home price going up more than 80% from 2000 to 2006 is extreme. The average home price going up 100% from 2000 to 2018 isn't that crazy. Maybe prices will go down, maybe not, I wouldn't call it a bubble yet. There are also a higher percentage of people living in cities, and I would suspect more people renting, which can drive purchase prices up for legitimate reasons.
That index is not adjusted for inflation.
- lazerpants 8y agoThe Case-Shiller Index IS normalized for inflation. "The indices kept by Standard and Poor are normalized to have a value of 100 in January 2000." Source: https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index
- phyller 8y agoI wouldn't be surprised if I misunderstood, but how is that normalized for inflation? Is the currency in January 2000 going to change in value? This chart from the same wikipedia article seems to show that inflation adjusted (dotted line), the prices are less than 30% higher than in 2000: https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index#/media/File:Case_shiller_janv09.jpg https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index#/me...
- lazerpants 8y agoHmm... After reading the index methodology, I think you're right. I had thought their indexing accounted for inflation, but it doesn't seem to based on the PDFs I skimmed.
- snarfybarfy 8y agoYou call 100% in 18 years normal? I sure do hope that your salary also doubled in those two decades.
- phyller 8y agoI said "not crazy", I didn't say normal. Do the math. 4% a year, compounded over 18 years, is 102.6%. 4% a year in the US is above inflation, but not crazy.