American property values: 1890 to 2011

By Darryl Stringer • Oct 19th, 2008 • Category: Finance, Property Prices

Yale economist Robert J. Shiller has released a graph showing the change in American property values from 1890, and projected forward to 2011.

This data is based on using an 1890 property selling for the modern inflation-adjusted equivalent of $100,000 US. Property values experienced mini-booms in the 1970s and 1980s, but it is the enormous spike in values that began in 1997 and finished in 2006 with a value of $200,000. Between 2006 and 2011, it is expected that prices will drop back close to 1997 values, a decrease in property values of 43.5 per cent. Note that it’s 2011 before American property values hit rock bottom.

Australian property values also climbed dramatically from about 1998 onwards. At the moment Brisbane’s median property value is about $450,000. If prices here were to drop by the same percentage as prices have dropped in the USA, then Brisbane’s median property value would be about $254,000 within 3 years. That would be massive, and in my view, impossible. Property prices have dropped in Australia, and they could drop further, but I just can’t see real estate prices going that low.

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