Interesting HPI graph that I got from Calculated Risk. It took about 9 years, from 1976-1985, for the HPI to double; 15 years, from 1985 to 2000, to double itself again; and finally 6 years, from 2000 to 2006, to double itself . 6 years? Oh yeah, that was the bubble :)
After 10 years, the HPI stands at about 40% higher than the year 2000. What's the likelihood of the HPI index go back up to 200 again by 2020 or 2025? This would represent a 100% increase of the HPI in about 20 to 25 years, counting from the year 2000.
Another thing to take into consideration is, interest rates were around 8% in 2000 vs. now at around 5%. Based on an increase in purchasing power, due to lower interest rate now, can one argue that buying now is almost equivalent to buying in 2000? This question is only specific to this HPI graph and not others. I know all real estate is local, which brought up another point. Some areas had likely over-corrected while other areas are not done correcting, or could it be that the gap is getting wider between the more affluent areas vs. less affluent areas?