Home prices never go down: Follow up.

In my previous post, I argued that the average prices of homes at the national level don’t and shouldn’t decline significantly in nominal dollars, and it isn’t something you should worry about. It is one of the many wrong lessons that are broadly taken from the wrong explanations about what happened in 2008.

I began the post with this comparison between prices in the US, Canada, and Australia. The US is the anomaly here. You shouldn’t benchmark your fears and expectations to that.

Figure 1

I thought it might be interesting to dig into the details a little bit more.