From 1940 to 2000 home values seemed to move up in significant ways but so did household income. From 1940 to 1950 the median home price more than doubled. This happened yet again from 1970 to 1980. From 1990 to 2000 home prices nationwide went up by 51 percent. The more important factor to remember is that household incomes were going up during this time as well. That is something that cannot be said for data from 2000 to 2010.
Take a high priced state of California who underwent two housing bubbles in the last two decades. According to Census data the median price of a California home went through these motions:
2009: $479,200 (data from the 2009 ACS)
2011: $249,000 (current May 2011 data, DataQuick)
After all the tumultuous ups and downs in California home prices are close to their 1990 level. The caveat of course is that California was in a bubble in 1990 similar to the price point in 2009. Yet in all of this information we need to remember that incomes have gone stagnant. The only reason home prices went into the mania that they did was access to easy financing brought on by the Wall Street machinery and the government loan apparatus. The 1920s setup a nation with speculators and snake oil salesmen conning the American public into a false sense of prosperity (by the way even at the peak in 1929 60 percent of Americans were still living at or below the poverty line). And of course the Great Depression quickly followed once the facts were acknowledged:
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