- Dennis Norman
By: Dennis Norman
I came across an interesting chart that I want to share. The chart below, courtesy of Chart of the Day, shows median home prices in the U.S. since 1970 (adjusted for inflation). As you can see from the chart, home prices trended upward from 1970 until peaking in the late 70’s (right around 1979 when I got into real estate, great timing on my part!) and then began dropping until the mid 80’s when prices began a rather rocky and unsteady climb upward.
As the chart illustrates, median home prices really started increasing, and at a more rapid rate, around 1991 and continued until 2005, basically the peak of the market. Since 2005 the trend has been downward to the point where median home prices have fallen about 30 percent from the peak.
Recently I did a post with a video of an interview with Karen Weaver, an analyst with Duetsche Bank, in which she predicted that home prices will fall 42 percent “peak to trough”. Based upon her prediction, and looking at the above chart, it would seem to indicate if Weaver is correct, and prices drop another 10 percent or so, it will put home prices within the range on the chart where prices have appeared to be most stable over the last few decades.
Granted, the St. Louis housing market does not usually see as large of swings upward or downward in home prices as the coastal areas, but I would suspect St Louis to still follow the trned, nonetheless.
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