There Won't Be a Housing Price Rebound

....at least not for a long time.
News outlets keep acting like we are all waiting with bated breath for a housing price rebound to pre-recession levels.   Maybe homeowners who signed on the dotted line expecting ridiculously high appreciation are waiting as such, but I'm not.  Frankly, any economist (or analyst) who believes that housing prices were in a bubble, aren't.

Price bubbles, by their very definition, are about prices that reach unsustainable heights.   This means, when they fall, they don't get back to those heights unless one of 2 things happen: 1. another bubble forms, or 2. natural long-term appreciation reaches that level.

I don't know of anyone expecting another housing bubble anytime soon, and I think it would be ridiculous to assume the housing prices should be - if accurately priced - at the levels they were in 2006.  Here's a nice graph from Robert Shiller (of the Shiller Price Index).  Does the top of that red line look like something we are going to get back to anytime soon?  No, it doesn't.

Economists all say the same thing - we aren't even at the bottom yet - there's still too much housing inventory to put much of a dent in price valuations now.    The next logical statement though is equally important  - even when we get past the bottom, our next top is not going to be anywhere near where it was in 2006.

So, don't hold your breath.