April 29, 2008
– Comments (3)
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You could have picked 1991 to make your point:)
Heh. The bottom was in for a while. Finance was nowhere near as creative back then, alas.
Hey, looking at 1991, when there was nary a bubble, prices didn't start rising consistently again until 1997. They just stopped falling as fast.
So, let's pretend you are in a bubble market like San Francisco. You pay $650,000 for a small place that might have sold for $750,000 only a year ago. Prices stop falling as rapidly, and only decline by an average of 4% in each of the next 5 years.
Is now a good time to buy? Will you feel better because the delcine is no longer so extreme? How much "equity" will you have remaining in 2013?
Your house will be worth $530,000. Probably still overpriced, but hey, SF is a great place to live, it deserves to be expensive.