A Real-Estate Roller Coaster (Literally)

The Yale economist Robert Shiller has indexed American housing prices going back to 1890.

You know how people like to say that such-and-such experience “was a real roller-coaster ride”?

Well, the blogger Richard Hodge at SpeculativeBubble.com wanted to see if housing prices really were a roller-coaster ride. So he plotted Shiller’s inflation-adjusted index onto a roller-coaster video ride. It is pretty fantastic.

(Hat tip: Matthew Fogarty)


chrisbryan

Hey CNannery, lets not blame Li Kai Shing for Canada's housing bubble.

Rishi

When I saw the video of the roller coaster, I was immediately reminded of the current real estate boom in my country, India. Prices of real estate in Gurgaon, a suburb of New Delhi have increased 3-4 times over the last 4-5 years on the back of easy credit and low interest rates! The heady economic growth in the last few years has increased the purchasing power of Indians greatly but it is far lower than the rise in real estate prices. Every day, large new housing and commercial projects are announced and get sold off in a couple of hours! Nobody is even willing to consider this as a bubble.

furiousball

I'd actually like to put some of my former real estate agents on roller coasters that do flips and all that sans lap belt or any safety device of any kind. Realtor is latin for "do nothing".

bmc

http://straighttalk.goingon.com/permalink/post/4711

SpiderWoman

The so-called "straighttalk" link from bmc is nothing but crap. It tries to paint a rosy economy and states that it's only people's impression that the economy is bad, since the numbers say otherwise.

What that glob is hiding is that the vast majority of people are worse off under the current economy, not better. It makes no difference what the figures show, since they are based on corporate wealth, not what the average person gets out of it.

socrates2

If we spend only twice as much for housing than the 1880's, what variables have intervened since?
Housing development and availability everywhere and anywhere in the republic?
Limited availability of housing stock in highly desireable areas; therefore, pressure to settle for and on less desireable real estate?
Job availability other than in traditional metro areas, again easing housing pressure (and prices)in those sectors?
As one writer already said, "tracking housing prices is a tricky business."
Quality and availability of raw materials for building--from brick to lumber, etc.
Economic pressures on population to leave over-priced, metro areas?
And that harshest of all "laws" on a growing, dense population: Supply and demand...
Please re-read the anecdote-rich, "A Tree Grows in Brooklyn."

caveatBettor

Hey SpiderWoman, when I see or hear someone say "It makes no difference what the figures show", it sounds like confirmation bias may have strangled the ability to reason.

pkimelma

caveatBettor, you should read what SpiderWoman actually said. She did not so it makes no difference, period. She said it makes no difference because they are measuring corporate wealth and not individual wealth. I do not know what is true here, but the 1st rule of statistics (the "figures") is to be sure you know what they are measuring.

caveatBettor

pkimelma, I did read what she said. While GDP figures do not isolate corporate wealth from individual wealth, unemployment figures are indicative of individual wealth.

one good source of individual wealth is the household data from the Federal Flow of Funds quarterly reports. The latest shows, from 2002-2006, household net worth, on aggregate, rose from $39 to $56 trillion dollars.

some will undoubtedly react to that, saying "but all those gains are concentrated in the super rich". they will dimiss the studies that show that Wal-Mart puts $200 per month of buying power into each household. they will dismiss morbidity trends in the last few decads.

i agree that figures are often misleading and erroneous. find better figures, to replace the ones that are inferior. don't dismiss the ones presented out of hand, simply because they don't help your case. this is Freakonomics, not DailyKos.

Read more...

http://new-york-real-estate-lawyers.com/

Life is a roller coaster ride too!

Frank Risalvato

Unfortunately it is NOT ACCURATE and provides related year information only sporadically. I bought my first house in 1991 (which according to the graph was an UP year), and housing was dead throughout New Jersey for a year prior through another 3-4 years later.

I bought my second house in 1994 which still remained very slow and many homes were listed for one year or more.

The graph shows a big dip in 1997. As if prices went down only that single year ... ridiculous and not accurate. And there are also many regional factors the graph ignores.

I saw no dip anywhere in New Jersey in 1997. By 1999 -2000 there were bidding wars on quality homes in good neighborhoods.

Also, someone should update the graph to include the balance of 2007 and 2008. My guess is you'd have to drop back down to the ground and possibly dig an underground tunnel to reflect the 20% average drops this past year.

steve

wow that's great and cool.
*******
Steve

steve

The above thought is smart and doesn't require any further addition. It's perfect thought from my side.
*******
Steve

Josef Svenningsson

I would love to have a tool that could help do these kinds of funky visualizations. Something to think about for visualization software like swivel and spotfire.

chancey

this is very cool. towards the last stretch of climing, you almost feel the coming fantastic plunge is nearer and nearer...

ftelegdy

If only we could have seen 2006 from 1970 in real life like you could on the roller coaster...

egretman

If only we could have seen 2006 from 1970 in real life like you could on the roller coaster...

Someone sent this to me recently and I have been sending it to everyone I know under the age of 35 who has never ever experienced a housing recession or depression.

Young people just think you buy a house and sell for a 20% gain in 2 years and that that can never ever stop and will go on forever and ever.

Chewxy

Josef: It was made with Roller Coaster Tycoon 3 (it was stated at the end of the video)

I want to ride on such a roller coaster btw... 4 mins of pure rush of adrenaline.

David Peterson

There's a huge flaw in this analysis; if he's using the standard inflation index that the BLS releases, those include the price of housing as a major part (something like 30% of the total index) of that index.

BlueNumber2

I saw this a couple of weeks ago and thought it was pretty cool. It reminded me of the Douglas Admas book Dirk Gently' Holistic Detective Agency in which a character previously struck it rich by creating software to translate corporate profit numbers into music. The better sounding the music, the better the company was doing.