[quote=pemeliza]”It was a **credit bubble** that pushed prices up, in the aggregate, in the 2001-2007 period”
I would argue that the “credit bubble” period was more like 2003-2007.
Also, saying 1988 was near the last peak is like saying 2003 was near this peak. While certainly a true statement, things were changing incredibly fast during the 1988-1990 and 2003-2005 time periods.[/quote]
If you look at the rate changes, you’ll see that 2001 marked the beginning of the blowoff top in the credit bubble (which, IMHO, began in the 1980s). Housing sales had already slowed, and prices were beginning to drop because we had entered another recession — which we needed in order to clear the excesses and reallocate capital. Greenspan, in his quest to keep us from ever experiencing cleansing recessions, pushed us into the manic period of the credit bubble. See what was going on (esp. the rate of change) from 2000-2001 here:
Yes, 1988 wasn’t the top of the previous housing cycle, and things were changing quickly, but it was near the top. Just like around here, some areas were pretty much topped out in 2004, while others continued their stratospheric rise into 2006 (and some into 2007). It’s not necessary to nail the exact year, especially when trying to time tops and bottoms, it’s just important to get *near* tops and bottoms when selling or buying.
As for sdr’s example, I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000 (depending on the area and the other factors mentioned above, it could have reached the previous peak anywhere between 1998 and 2001), then I added the credit-fueled premium from 2001-present to arrive at my approximation.
