patrick.net

I think the end of that line is below March 2009(first chart). Isn't it?

yes. income was estimated for 2010.

Syphilis says

yes. income was estimated for 2010.

LOL. I look forward to the 2009 bottom callers comments.

bubblesitter says

I think the end of that line is below March 2009(first chart). Isn’t it?

The first chart is kinda useless since interest rates are the third variable we need to analyze.

Here's a chart showing that rates fell 20% in 2009 and touched -30% in 2010, compared to the 2006-2008 period.

It is possible now in Japan to get 1% mortgage interest rates for the first 10 years, then 2-2.4% for years 11-35. We get that here and "Price to Median Household Income" will shoot up like a rocket.

Does anyone have the facts about how much government intervention there was after 1989?

I mean, we know that Greedspan lowered the interest rates for an extended period, but what else was going on?

But interest rate is not the only player. Unemployment rate has the highest impact on home prices IMO.

bubblesitter says

Syphilis says

yes. income was estimated for 2010.

LOL. I look forward to the 2009 bottom callers comments.

Well for one you might want to use the last chart instead since those are the actual prices.

i also believe the government intervention in 2009 extended the bursting of the bubble by roughly a year (see the two bear-market-rally peaks in 2009/2010) so instead of 5 years of price/income decline, we’re probably at year 4.

That's where you're wrong. Government intervention didn't prolong the recovery. It more like masked the crash that would have happened otherwise.

Believe it or not that's why a lot of people were bitter about not letting the free market "take it's course".
Mostly the same as the "no we dont want healthcare" tough love crowd.

GUBMINT had two choices. Their job is to protect people from people.

#1. DO nothing, Allow the correction to snowball. Resulting in depression, and rioting. (Would illegal aliens then return to their home country ?)

#2. Spend tax money to soften the impact . These Firemen have placed a trampoline for the demographics who are jumping off the burning building.
Will they save the building ? Sorry, the building was plastic !

They slowed the pendulum from swinging .

Imagine, soon we will again be offering LESS than the asking price !

justme says

Does anyone have the facts about how much government intervention there was after 1989?

zip, zero, nada... the boom was income driven. The turn down was due to many local/national/international factors.

point 3 is interesting. i did not realize the price to income ratio was still higher than the late 80s.

i don't think you should call the late 80s a bubble on a national basis. there were local bubbles in the late 80s, but it was not national. I am pretty sure Shiller said that the bubble that began in 1997 was the first national bubble in Irrational Exuberance.