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This is from the Fed Flow of Funds data:
http://www.federalreserve.gov/releas...rrent/data.htm
Graphed out at:
http://www.housingbubblebust.com/Fed/GDPvsHSG.html
Notice how housing lagged GDP growth; this trend reversed in the late 70s.
The $64,000 question: Will housing value again lag GDP as this present 30 year old cycle reverses? By how much? What would that mean?
A reversion to 1975 levels would mean aggregate housing value would drop from $20T+ to $11.7T --> assuming GDP doesn't drop below present value of $13.76T.
That would be the 43% drop I've seen in various places.
Note that the estimated 10-15% lag of housing value behind GDP was consistent from 1945 to 1977.
http://www.federalreserve.gov/releas...rrent/data.htm
Graphed out at:
http://www.housingbubblebust.com/Fed/GDPvsHSG.html
Notice how housing lagged GDP growth; this trend reversed in the late 70s.
The $64,000 question: Will housing value again lag GDP as this present 30 year old cycle reverses? By how much? What would that mean?
A reversion to 1975 levels would mean aggregate housing value would drop from $20T+ to $11.7T --> assuming GDP doesn't drop below present value of $13.76T.
That would be the 43% drop I've seen in various places.
Note that the estimated 10-15% lag of housing value behind GDP was consistent from 1945 to 1977.