Chart of the day: Case-Shiller 2005


Question: Could one see a bubble in housing back in 2005 when house prices were still rising?

Related Posts
1 of 1,030

Well, to answer that question, I took the S&P/Case-Shiller Composite 10 Index and mapped it the rate of inflation. See, Robert Shiller, one of the Case-Shiller index authors, said in his seminal book Irrational Exuberance that house prices over the long-term have grown a tad more than the rate of inflation. So, you’d expect house prices to rise about in line with the Consumer Price Index (CPI).

Let’s look at the 10 years of Case-Shiller vs. the CPI from Jan. 1995-Jan. 2005. What do you think?

Get real time updates directly on you device, subscribe now.

Do NOT follow this link or you will be banned from the site!