I was right!

So the wife and I are planning on buying a home sometime in the next five years. I've been dreading the day, because house prices over the past few years have been higher than I thought they should be. My parents bought a two-story , six-bedroom, 3 1/2 bath house with a finished basement in Utah for around $100,000 in 1990. Admittedly they got a screaming deal thanks to some extenuating circumstances, but this was the the baseline I expected to see (more or less) when it came time for me to buy my first house.

I expressed this idea to Mandi a few months ago, and she said no way was that realistic. Current home prices are what they are, and there's nothing weird or irregular about them. We'd just have to bite the bullet and buy some overpriced collection of drywall, wood and stone and call it good.

But! today I found this graph that tracks home prices in America over the last 120 years (larger version here).

So here we have evidence that the boom in housing prices that started in the late 90's is completely out of whack with the historical data. Note the chart accounts for inflation, which just makes the spike look even more insane. 

If President Obama's current plan to bail out homeowners doesn't keep these artificially-high home values where they are, things are looking good for first-time buyers like me.  

James Quinn:

Barney (Frank) thinks he can reverse the law of supply and demand by throwing your money at the problem. He will succeed in wasting billions of tax dollars and home prices will still fall 20% to 30%. Unsustainably high home prices can not be sustained.

Here's hoping.