As another data point, I paid x dollars for a house last year in Mission Hills that sold for (3/5)x dollars in 1988. So I paid five thirds of the 1988 price which was around a 67% appreciation over the last 21-22 years. If you look at the government stats, that is under the rate of inflation for the same time period. Interest rates in 1988 where 8-9% and they are now 4-5%. Frankly I have seen better deals close over the last 12 months than mine but I loved my house and was willing to pay up for it.
Based on my study of sales history, I would say that 1988 prices were at least 10-15% under the peak prices of the last cycle which occurred closer to 1990. It has been a while since I looked at the numbers, but certainly 1988 prices were not the peak prices of the last cycle at least not in Mission Hills.
Also, again this is Mission Hills, but prices recovered to previous peak prices probably closer to 1998. Certainly, they were quite a bit higher than the prior peak by 2000.
