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Housing's Big Picture Isn't Pretty

It's disturbing when economists get so used to crunching numbers and watching charts that they come to think the future must be in the charts. Historical trend lines and long term averages are meaningless and have no bearing on where home values will bottom in this recession.

No home buyer or seller will ever check the 100 year trend line in making an offer or setting a list price.

It should be obvious that home prices will continue to be, as always, simply a function of supply and demand, with these long term historical trends having no causative effect. It's a mistake to use past results to predict the future. From 1900 to 2000, the Dow Jones Industrial Average rose 175 fold from 66 to 11,000. If that trend line holds, the DJIA will be at almost 2 MILLION in the year 2100! Ain't gonna happen.