US House Prices Relative to S&P500
Nothing like a ratio chart to really stick it to the Real Estate Bulls. Housing prices on an absolute basis look like garbage (See Case-Shiller), they look horrible when Adjusted for Inflation, and look even worse relative to Stocks.
Reuters - This chart is particularly interesting because it dates the big decline in housing as a worthwhile asset class all the way back to the early 1980s. You can see the housing bubble and bust in the spike at the end of the chart, but you can also see that this is a very volatile series, and that houses can and probably will become much cheaper still, relative to stocks.
Pragmatic Capitalism - Despite all the attempts to manipulate the real estate market, the government has largely failed in attempting to stabilize prices. In other words, it’s undergone a much more natural price discovery process. The equity market, of course, has been intervened in at every step of the way and the government has undoubtedly succeeded in propping up this market.
Sources: