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Updated graph from "Irrational Exuberance"

ben628496ben628496
edited September 2008 in Housing Bubble
If you search on google for "irrational exuberance", it seems that the only takeaway anyone had from the book was the graph of inflation-adjusted housing prices taking off like a rocket up until late 2005. (http://www.biggerpockets.com/images/blog/shillerbig.gif) Has anyone seen an update of this data as of this year? I was going to try to update the graph myself (because I was curious), but when I pulled the most recent case-shiller data, it seems that they don't inflation-adjust it, so I can't exactly do that.

Comments

  • bilirubenbiliruben
    I think it is inflation adjusted.
  • ben628496ben628496
    Well, the data didn't match - the numbers in the case-shiller report (http://www2.standardandpoors.com/spf/pd ... 072943.xls) are normalized with 2000 prices == 100, whereas the graph has prices normalized at 1890 prices. However, on the graph, 2000 was definitely above 100, which means the prices from 2000 to 2005 (according to the graph) less than doubled. However, if you look at the data in the excel spreadsheet, 2000 to the end of 2005 more than doubles.
  • ben628496ben628496
    I'd post a graph, but I'm too lazy... :) The index is definitely not inflation-adjusted. I matched it up with CPI data, and that makes it look more like the irrational exuberance graph.

    It wouldn't make sense for an index (which is just like a stock market index) to use inflation-adjusted numbers.
  • anforowiczanforowicz
    ben628496 wrote:
    It wouldn't make sense for an index (which is just like a stock market index) to use inflation-adjusted numbers.

    True. But it would also be nice if the vertical axis used logarithmic scale so that the most recent changes are not exaggerated.
  • ben628496ben628496
    anforowicz wrote:
    True. But it would also be nice if the vertical axis used logarithmic scale so that the most recent changes are not exaggerated.

    The vertical axis...for an index? Or do you mean the graph from irrational exuberance? Because that's the index (exponential) divided by CPI (exponential), which means it shouldn't need to be displayed on a logarithmic graph. That's why it's so scary - it looked like it was exponential when it shouldn't have. :)
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