Richard Florida
by Richard Florida
Thu Jun 24th 2010 at 3:31pm UTC

Chart of the Day: Slow Growth in House Prices

The Case-Shiller Home Price Index projects slow growth in house prices for the next four years or so. The chart below (via The Wall Street Journal) tracks the Case-Shiller Index from 2000 through 2014.

After a slight uptick, the index is projected to decline again by about 1.4 percent this year. The cumulative increase for the next five years is projected to be 10.5 percent – or about 2 percent a year. This will make up about a third of the total loss (28 percent) from peak housing values in 2006.

This seems like an optimistic scenario – and one that is highly uneven regionally. This small overall increase will be driven by significant increases in a small number of superstar cities and regions, while prices will continue to stagnate and decline across many more places.

So, if you’re thinking about buying a house, there’s no rush: You have plenty of time before prices start to tick up significantly. And get ready for a long haul before house prices rebound. In The Great Reset, I point out that it took two and half decades for house prices to recover from the 1929 crash.

3 Responses to “Chart of the Day: Slow Growth in House Prices”

  1. Michael Wells Says:

    If we treat the bubble as an aberration and draw a straight line from 2000 to first quarter 2010, it’s almost the same growth rate as what’s projected. Bad news if you bought between 02 & 06, otherwise averages to slow growth in the last decade.

    Absolutely uneven regionally, or even locally. Our neighborhood in close-in Portland is pretty stable, further out in the burbs are worse off, Bend is suffering.

    We were just in New York, and I saw condo prices that seemed reasonable. Good time for creative class types to buy in otherwise unaffordable cities at low interest rates.

  2. Wil Says:

    There has never been a decade in US history when average house prices did not appreciate…This current market correction is an excellent time to buy.

  3. Today's New York Times Says:

    A house is more than an investment, as the article beautifully explains :
    http://opinionator.blogs.nytimes.com/2010/06/28/the-other-real-estate-value/?hp