Back to pre-boom
Date posted: April 29, 2011
As the economy slowly improves. economists and others are interested in how fast many economic measures return to pre-recessionary level. One economic statistic has now returned to its pre-recessionary level — and then some. N.C. State University economist Mike Walden explains.
“Unfortunately this is not a good statistic, because it is housing prices and the return to pre-recessionary levels is really not good. A little history here: We had a literal and very large housing boom in the early part of the 2000s, meaning that housing prices went up.
“For example, in 2002, the average house cost $155,000 in the country. At the peak of the boom, 2006, that same house cost $230,000. That’s, again, why a lot of people made a lot of money on buying and selling homes.
“But, of course, what most people know is over the last three or four years we have had a housing bust. Housing prices have come down. And now that house that started at $155,000 in 2002 went up to $230,000 in 2006. Guess what? It’s back to $155,000 today.
“So all of the housing boom that we saw the mid-part of the last decade has now been erased by the housing bust.”
Category: Economic Perspective