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The Federal Reserve publishes the Annual Flow of Funds Accounts.
This Historic Data contains yearly estimate of the then total
market value of all US homes.
The expansion and the risk is associated with it is almost unbelievable.
This information is contained in line 4 of the
B.100 Balance Sheet of Households and Nonprofit Organizations (1).
| Year |
Value |
Year |
Value |
Year |
Value |
Year |
Value |
| 1945 |
116.0 |
1965 |
582.2 |
1985 |
4574.0 |
2005 |
19402.8 |
| 1946 |
133.4 |
1966 |
624.5 |
1986 |
5001.0 |
2006 |
20620.8 |
| 1947 |
158.9 |
1967 |
660.2 |
1987 |
5501.1 |
2007 |
20879 |
| 1948 |
180.0 |
1968 |
740.8 |
1988 |
5976.2 |
2008 |
17446.1 |
| 1949 |
196.9 |
1969 |
804.3 |
1989 |
6473.6 |
2009 |
17038.4 |
| 1950 |
222.4 |
1970 |
845.6 |
1990 |
6576.0 |
2010 |
- |
| 1951 |
249.1 |
1971 |
925.8 |
1991 |
6809.6 |
2011 |
- |
| 1952 |
272.7 |
1972 |
1064.7 |
1992 |
7122.1 |
2012 |
- |
| 1953 |
293.1 |
1973 |
1213.9 |
1993 |
7357.7 |
2013 |
- |
| 1954 |
315.4 |
1974 |
1219.3 |
1994 |
7523.2 |
2014 |
- |
| 1955 |
344.7 |
1975 |
1369.1 |
1995 |
7990.1 |
2015 |
- |
| 1956 |
371.4 |
1976 |
1541.6 |
1996 |
8320.6 |
2016 |
- |
| 1957 |
394.4 |
1977 |
1831.9 |
1997 |
8779.8 |
2017 |
- |
| 1958 |
415.9 |
1978 |
2149.4 |
1998 |
9545.6 |
2018 |
- |
| 1959 |
441.1 |
1979 |
2534.1 |
1999 |
10395.6 |
2019 |
- |
| 1960 |
464.4 |
1980 |
2867.2 |
2000 |
11401.1 |
2020 |
- |
| 1961 |
488.6 |
1981 |
3213.9 |
2001 |
12491.5 |
2021 |
- |
| 1962 |
510.7 |
1982 |
3367.2 |
2002 |
13679.8 |
2022 |
- |
| 1963 |
531.3 |
1983 |
3522.0 |
2003 |
15084.8 |
2023 |
- |
| 1964 |
557.0 |
1984 |
4027.4 |
2004 |
17243.3 |
2024 |
- |
The bubble was clearly created in the mid 70's. It has kept expanding since then. The bubble accelerated in the mid 90's. And now it is pretty much out of control. Fannie, Freddie and the Fed's have been pumping liquidity in the market since the mid 60's, and the bubble has just kept expanding. I think the other half of the graph for the next 30 yrs will be very symmetric to the past half of 30 yrs. The valuation for 2005 is going to be about 20 Trillions. 2005 will also be very well the peak of this bubble. This ballooning valuation is due to not just the excessive prices, but also due to the number of housing units that have been built. Census Data for Housing Units is available for the years since 1980.
| Year |
1980 |
2004 |
Difference |
% Change |
| Housing Units |
88.4M |
122.6M |
34.2M |
38.75% |
| Population |
226.5M |
293.6M |
67.1M |
29.62% |
| Capita Per Hsg |
2.56 |
2.39 |
0.17 |
- |
This hyper appreciation has led many people to invest in homes. As a
home gets older, it should depreciate in value.
Nobody pays more for an older car, right?
It should be no different for houses either. But for last several
decades, the reverse has been happening.
It's about time, The Laws of Economics Assert Themselves.
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