Reply to Example of how housing prices have far outpaced inflation

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[quote=Anonymous]So out of curiosity, I checked and my childhood home in a pretty depressed town in the NE -- my parents sold for $103,000 in 1981 and it is now zillow estimate at $575,000 (no idea if that's realistic since it hasn't been sold in 44 years).  That's way above inflation, even for a depressed area, over those 44 years.

As another data point, I checked the starter house we bought in PG County in 2003 -- that one is slightly closer to inflation -- zillow is a smidge above where inflation would put our 2003 price.  I think the 2008-2009 market crash really impacted some areas (like Prince George's County), so for people that bought in the early 2000's, that's a factor.

In general, we had a super crazy economic system for the past decade or so that really impacted real estate negatively.  The combination of sustained high stock market returns plus incredibly low interest rates meant that people were willing to dump a ton of money into real estate, resulting in bidding wars, etc. etc.  I think it's likely another bubble, and prices will crash.  When I look at our finances, I mentally discount our home equity by about 50% -- I don't really trust it will be there when we eventually want to sell.  [/quote]

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