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When will real estate prices rise? Ask the feds

Perspective: A new theory for housing bubbles

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Editor's note: The following is a guest perspective. 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. But it can, and it does. The thing about this chart is that it has been adjusted for inflation. The reality is that most of what we think of as home-price appreciation is really inflation. In other words, it's not the value of the house going up, but the value of the dollar going down. The second thing I noticed...