When will real estate prices rise? Ask the feds

Perspective: A new theory for housing bubbles

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Almost everyone has seen the chronological home prices chart that accompanied the second edition of Robert Shiller’s book, "Irrational Exuberance."

What everyone notices at first glance is, of course, the steep increase in prices during the latest housing boom when compared to previous cycles. But when I first saw it something else caught my eye.

What I noticed immediately was that if you bought a house in 1955 and sold it in 1999, the house actually lost value. Seems ridiculous. Those of us in California immediately think this couldn’t apply to us, given the price increases we’ve seen over the years.