Real Estate Dependency of Households

Monday, June 12, 2006 | 02:00 PM

Earlier today, we looked at several Real Estate related charts.

One particular chart we looked at from Northern Trust showed the percentage of
net worth improvement Households derived from Real Estate. But it lacked historical context, and I mused that I would like to find out exactly how much these numbers deviate from historical norms.

Amanda Mason of Northern Trust came to the rescue, and informed us of the specifics: The median from 1952 to 2005 has been 19.9%. Compare that to 2005's 61.2%.

Wow! That is quite revealing as to how dependent Households have become on Real Estate for net increases in worth.

I updated Asha Banglore's chart with that new info from Amanda:

>

Gains_from_re_1

>

Reversion to the mean is cruel bitch, ain't she?

>

UPDATE June 13, 2006 6:41am

Interesting report from National City Mortgage on  where the largest overvaluations can be found:

House Prices in America
Updated for the 1st Quarter of 2006
http://www.globalinsight.com/gcpath/1Q2006report.pdf

The short version is in a story by Marketwatch columnist Rex Nutting:  More housing markets overvalued

Monday, June 12, 2006 | 02:00 PM | Permalink | Comments (17) | TrackBack (0)
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Comments

Thanks, Barry. what a powerful and creative chart. It would be interesting to see the pattern over a longer period with more data points to see what else we can learn about its variability over time.

Posted by: Trend Watcher | Jun 12, 2006 2:13:30 PM

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