For general discussion and debate. Possible talking point: Will real estate values ever get back to the 2006 peak?
As painful as the decline has been, history suggests home values still may have a long way to drop and may take decades to return to the heights of 2½ years ago....So far, home values nationally have tumbled an average of 19% from their peak. As bad as that is, prices would need to fall as least 17% more to reach their traditional relationship to household income, according to a USA TODAY analysis of home prices since 1950. In that scenario, a $300,000 house in 2006 could be worth about $200,000 when real estate prices hit bottom.
Will real estate prices in most areas of the country ever get back to where they were in 2006 adjusting for inflation, or were these once in a lifetime values that we'll never see again? If the latter, as many people's retirement funds come from the appreciation and equity built in their homes, how would such a longterm bearish outcome impact the finances of the baby boomers and their children as well as the economy of our nation in the decades to come?