Bakersfield's Official Real Estate and Economic Site
Shiller is totally wrong. Not just that inflation measures have changed but the home of 1890 would not be acceptable today. Hedonistic adjustments are wholy necessary. I can build or buy an 1890's house today for $40,000 easy. It just isn't very pleasant. I know what he's trying to say but he just cannot use the data this way. Cotton covered electrical wiring service for 10 amps anyone?
When supply increases, prices fall: That’s been the trend for 110 years, since 1890. But since 1997, real home prices have increased by about 90 percent. There is no economic fundamental—real income, migration, interest rates, demographics—that can explain this. It means there was a speculative bubble. And now that bubble is bursting.
>>>>I can build or buy an 1890's house today for $40,000 easy.>>>>The land costs more than that.
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