Still Crazy After All These Years

Still crazy after all these years
Oh, still crazy, still crazy, still crazy after all these years.
--Paul Simon, singer and songwriter

Although there are plenty of reasons why there's more downside to come in the residential real estate market, the simplest explanation is probably the best. Despite the carnage we've seen over the past half-decade, home prices are still at lofty -- no, crazy -- levels, as Pragmatic Capitalism reveals in "U.S. Housing Prices Still More Expensive than Any Point in Last 120 Years":

Today’s chart of the day comes to us courtesy of Robert Shiller at Yale University. The following is Shiller’s famous inflation adjusted home price index. Interestingly, despite a 30%+ decline from peak to trough, housing prices are still more expensive than at any other point in the last 120 years when you exclude the recent bubble era. Some say housing prices have bottomed. Not unless it’s truly “different this time”.

Michael J. Panzner
Editor, Financialarmageddon.com

Michael J. Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, published by Kaplan Publishing.