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ltokuda
Participant[img_assist|nid=7162|title=
GRM, Real Case-Shiller HPI, Real Rent|desc=|link=node|align=left|width=466|height=315]Here’s an update to the Gross Rent Multiplier chart. I also added the inflation adjusted rent (in orange) and the inflation adjusted Case-Shiller HPI (in green). I normalized the rent and HPI data to match the GRM value in 1913. So all 3 data series start at the same value and we can see how they diverge over the years.
The recent housing boom sent prices into uncharted territory. Before that, prices remained relatively flat with a slight upward trend.
Rents went down a lot between 1930 and 1950. After that remained pretty flat with a slight downward trend.
The GRM has generally been going up over the years. As noted earlier, it seems like the GRM has gone up in steps.
ParticipantBobS, I hadn’t thought about the effects of inflation until you mentioned it … especially after we got off the gold standard. Since buying a house is a hedge against inflation, I would guess that it could affect the fundamental valuation of a house. I can see why the GRM might jump from 0.4 to 0.5 in high inflationary periods. But I don’t understand why it would stay at 0.5 for 25 years after that while inflation eased. I’m still thinking this one over.
ParticipantBobS, I hadn’t thought about the effects of inflation until you mentioned it … especially after we got off the gold standard. Since buying a house is a hedge against inflation, I would guess that it could affect the fundamental valuation of a house. I can see why the GRM might jump from 0.4 to 0.5 in high inflationary periods. But I don’t understand why it would stay at 0.5 for 25 years after that while inflation eased. I’m still thinking this one over.
ParticipantBobS, I hadn’t thought about the effects of inflation until you mentioned it … especially after we got off the gold standard. Since buying a house is a hedge against inflation, I would guess that it could affect the fundamental valuation of a house. I can see why the GRM might jump from 0.4 to 0.5 in high inflationary periods. But I don’t understand why it would stay at 0.5 for 25 years after that while inflation eased. I’m still thinking this one over.
ParticipantBobS, I hadn’t thought about the effects of inflation until you mentioned it … especially after we got off the gold standard. Since buying a house is a hedge against inflation, I would guess that it could affect the fundamental valuation of a house. I can see why the GRM might jump from 0.4 to 0.5 in high inflationary periods. But I don’t understand why it would stay at 0.5 for 25 years after that while inflation eased. I’m still thinking this one over.
ParticipantBobS, I hadn’t thought about the effects of inflation until you mentioned it … especially after we got off the gold standard. Since buying a house is a hedge against inflation, I would guess that it could affect the fundamental valuation of a house. I can see why the GRM might jump from 0.4 to 0.5 in high inflationary periods. But I don’t understand why it would stay at 0.5 for 25 years after that while inflation eased. I’m still thinking this one over.
ParticipantBugs, thanks for the explanation. The demographic factors make some sense to me. The passage of Prop 13 makes sense to me for the California market. But the increase in the Gross Rent Multiplier (from 0.4 to 0.5) in the 70’s happened at a national level. I’m not sure if there were any federal tax laws that could account for that. I’ll have to research and think about this more. Thanks again.
ParticipantBugs, thanks for the explanation. The demographic factors make some sense to me. The passage of Prop 13 makes sense to me for the California market. But the increase in the Gross Rent Multiplier (from 0.4 to 0.5) in the 70’s happened at a national level. I’m not sure if there were any federal tax laws that could account for that. I’ll have to research and think about this more. Thanks again.
ParticipantBugs, thanks for the explanation. The demographic factors make some sense to me. The passage of Prop 13 makes sense to me for the California market. But the increase in the Gross Rent Multiplier (from 0.4 to 0.5) in the 70’s happened at a national level. I’m not sure if there were any federal tax laws that could account for that. I’ll have to research and think about this more. Thanks again.
ParticipantBugs, thanks for the explanation. The demographic factors make some sense to me. The passage of Prop 13 makes sense to me for the California market. But the increase in the Gross Rent Multiplier (from 0.4 to 0.5) in the 70’s happened at a national level. I’m not sure if there were any federal tax laws that could account for that. I’ll have to research and think about this more. Thanks again.
ParticipantBugs, thanks for the explanation. The demographic factors make some sense to me. The passage of Prop 13 makes sense to me for the California market. But the increase in the Gross Rent Multiplier (from 0.4 to 0.5) in the 70’s happened at a national level. I’m not sure if there were any federal tax laws that could account for that. I’ll have to research and think about this more. Thanks again.
ParticipantThanks for all the great input. I want to start investigating these ideas and post some feedback data on them. One thing I’m trying to understand is the tax changes of the ’70. Can someone give more details on that? I tried searching the internet on it but came up empty.
ParticipantThanks for all the great input. I want to start investigating these ideas and post some feedback data on them. One thing I’m trying to understand is the tax changes of the ’70. Can someone give more details on that? I tried searching the internet on it but came up empty.
ParticipantThanks for all the great input. I want to start investigating these ideas and post some feedback data on them. One thing I’m trying to understand is the tax changes of the ’70. Can someone give more details on that? I tried searching the internet on it but came up empty.
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