Comparing the Housing Bubble to the Equity Bubble

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Similar to housing starts last week, the Case Shiller home price index (reported this morning) showed a solid improvement in the housing market versus last year.  The 10 city Case Shiller index was up 7.3% y/y in January, and the 20 city index was up 8.1%.

While the numbers are encouraging, prices still have a long way to recover.  A longer term look at the Case Shiller index shows that prices are mostly flat since hitting an initial bottom in 2009 and still down 30% from the peak.  It’s now been 80 months since home prices peaked.  For comparison, 80 months after the tech bubble burst the S&P 500 was back at all time highs.

Housing Bubble vs. Equity Bubble