The After Party

Here's a follow-up to my most recent post about housing prices. These two charts come from jparsons.net if you want a closer look.

This first chart shows that housing prices are approaching their historic averages but are not quite yet there. Keeping in mind that an average is made of both above-and-below average numbers, I expect prices to fall slightly below the average before beginning to recover. Let's see if this guess holds up: prices will stabilize (or stop declining rapidly, I should say) in 2012, stay flat in 2013, and start a slow, slow recovery in 2014.

This chart is more interesting to me. The blue line is housing prices and the purple line is equivalent rentals. The numbers will, historically, be close (each individual makes a purchase decision based on the cost of an equivalent rental home). I didn't know how much they'd separated in the housing bubble of the aughts.

Two years ago I was a die-hard renter. Then when I noticed that local rental prices were substantially higher than mortgage payments for an equivalent home ... well, back into the pool I jumped.