Welcome to the Vitus Capital Blog!
Notes to myself, possibly of interest to others.
-- Bill Northlich

Monday, May 10, 2010

Reminder - Home Prices

[ibid] -- The chart below shows this index of home prices, adjusted for inflation. Relative to long-term trends, it shows just how overvalued the U.S. housing market was at its peak in 2006 — prices were 3.5 standard deviations above the long-term average. Currently, prices are nearly one standard deviation above historical norms, which suggests in ordet to mean-revert to the long-term average, home prices need to fall by another 20%.

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