There is no housing bubble. Really?

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When I saw this headline I wondered if I had done a mini Rip van Winkle and fallen asleep for a few years. But no, it was a headline this week in an article read here referring to Southern California.

As America appears to be ready to go on a national diet after many years of super-sizing I found myself wondering if housing terminology were going through a similar metamorphosis.

These are the numbers for Los Angeles:

LA_IndexSource: Case-Shiller

The “not a bubble” increase in prices in Los Angeles over the last year has reduced the decline from the peak in 2006 from 42% to 35%. No, I don’t think that a market that is 35% below where it was 6 ½ years ago is in a bubble.

Andy by the way, the increase from the low in 1996 to today works out at around 5% per annum compound. That seems quite reasonable.