You can’t look at just the inflation number without the income growth factor. You have to look at real *income inflation* which is income growth minus the inflation in other categories. If this number is negative then affordability has declined not increased as many are suggesting here!
Real income is declining due to inflation and stagnant wages. This means less affordability.
If income is not adjusting at the same rate as inflation the term “Inflation adjusted home price” makes no sense whatsoever.
Also the 47% drop seems about right. I know a friend who bought his townhome in Aliso Viejo for $185,000 in 1997. Now appraised around $450,000 or so. A 50% drop would be $225,000 so pretty realistic in my opinion.
