More than enough

Interesting excerpt within a Bloomberg article on the real estate plunge in the US:

While prospects are grim in some areas, it wouldn’t be the first time prices made a comeback. The median U.S. home value tumbled 39 percent during the 1930s to $2,938 from $4,778 at the start of a decade dominated by the Great Depression, according to the Census Bureau.

Within 10 years the loss was erased, as servicemen back from World War II began buying houses financed with G.I. Bill benefits. The median home value increased to $7,354 by 1950, an average gain of 6.2 percent each year during the 1940s.

In the 1950s, home values surged an average of 15 percent a year, according to the Census. In the 1960s, the pace dropped to 4.3 percent before jumping to 18 percent a year in the 1970s, boosted by a U.S. inflation rate that reached 13 percent. In the 1980s, the average annual increase was 6.8 percent. The pace dropped to 5.1 percent during the 1990s.

Interesting to note how inconstant house price rises are, as well as the fact that home values just barely seem to outpace inflation. I’m reminded of a book I read — it might have been Robert Shiller’s Irrational Exuberance — where they pointed out that housing was rarely looked upon as an investment to be bought and sold like stocks until relatively recently, and it seems like it might be borne out by the fact that generally prices have tracked inflation, except relatively recently.

I don’t know enough about how housing was viewed during the Roaring Twenties, but given the 39% drop in value during the Depression, I’m wondering if housing had started to become looked upon as an investment back then, too?