Sunday, September 23, 2007

Some Charts

The Bureau of Economic Analysis updated some of their data (and revised some data points) so I decided to update one of my favorite charts in response.

Here is the average price of a Marin single family residence (SFR) divided by average per capita income for the years spanning 1969 to 2005. The data has been normalized to 1969.

Here is the same data as above except expressed as a percentage deviation from the base trend line (not shown).

Here is the average price of a Marin SFR in terms of the number of ounces of gold you could get in exchange for it for the years spanning 1969 to 2007 (the 2007 data point is based on today's spot price whereas all the others are the average for the year).


Blogger Matthew said...

Well, I'm no economist, but, as a fairly well educated engineer who has seen plenty of graphs in my day, I'll go out on a limb here and suggest that the price / capita income graph would indicate that these two indices are indeed tied to one another. What a shocker !! This can’t be ? Incomes tied to home prices ? How dare you suggest such a thing Marinite.

I noted that the slope of the graph during price appreciation periods is similar in shape to the depreciating periods. Duration is also similar at 6-7 years. This would suggest that we won’t see the bottom until 2012 or so. Given the enormity of the bubble, I can easily see this playing out that long with some dramatic drops the first 2-3 years as was experienced in the last downturn.

I also noted that the graph remained relatively flat for a longer period of time after the last downturn. That will be the case with this one as well, given the numbers (and the losses) involved. Sort of like the crowd at the beach in Jaws not wanting to wade into the ocean quite so quickly. Yes, that’s a good analogy I think given the sharks involved in the RE industry today.

Sep 23, 2007, 9:07:00 PM  
Blogger sf jack said...

The first two are my favorites of all of marinite's graphs.

Great work - and thank you!

Sep 26, 2007, 8:32:00 AM  
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Jun 26, 2009, 12:43:00 AM  

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