# Have We Entered The Low point of This Recession? **URL:** \ **Category:** Great Debates\ **Created:** [March 21, 2008, 11:52pm UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292 "2008-03-21T23:52:55Z")\ **Posts on this page:** 7\ **Page:** 2
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [March 24, 2008, 9:11pm UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/21 "2008-03-24T21:11:39Z")
[QUOTE=Fear Itself] [This graph](http://randolfe.typepad.com/.shared/image.html?/photos/uncategorized/housing_projection.jpg) depicts home prices since 1890. As you can see, the current boom is completely anomalous, and the projection is that homes will lose as much as 43% of their peak value by 2011, when they will return to a more sustainable valuation curve. [/QUOTE] I will repeat my beef with that chart: it doesn’t take into account the recent increase in home _sizes_. If it were adjusted to show price-per-square-foot, it would look a lot less scary. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 24, 2008, 9:17pm UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/22 "2008-03-24T21:17:41Z")
[QUOTE=gonzomax] Your broker said. Those are thee key words. He is a house salesman. [/QUOTE] I heard on the radio this morning that while sales are up slightly month over month (but still down 24% from last year) prices still went down. IIRC, it said there was a 9 month inventory of unsold houses on the market. I don’t think we’ve hit bottom yet. As for the general economy, I don’t think the impact of the slowdown in building and they layoffs in the financial sector have hit yet. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [March 24, 2008, 11:57pm UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/23 "2008-03-24T23:57:40Z")
[QUOTE=spoke-] I will repeat my beef with that chart: it doesn’t take into account the recent increase in home _sizes_. If it were adjusted to show price-per-square-foot, it would look a lot less scary. [/QUOTE] I have thought about that since the last time you raised this issue. Do you have any evidence that square footage remained basically flat from the end of WWII until the mid 90’s? Because housing trading within a pretty stable range during that period. ---
**Author:** ![Anomalous\_Reading](https://avatars.discourse-cdn.com/v4/letter/a/b3f665/32.png) [@Anomalous\_Reading](https://boards.straightdope.com/u/Anomalous_Reading)\ **Post date:** [March 25, 2008, 12:19am UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/24 "2008-03-25T00:19:10Z")
I’m still worried about all the money we are “creating” I want to know and see that inflation won’t kill us in 6-9 months, if not sooner. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 25, 2008, 12:42am UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/25 "2008-03-25T00:42:48Z")
[QUOTE=spoke-] I will repeat my beef with that chart: it doesn’t take into account the recent increase in home _sizes_. If it were adjusted to show price-per-square-foot, it would look a lot less scary. [/QUOTE] The price of the homes take square footage into consideration. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [March 25, 2008, 3:57am UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/26 "2008-03-25T03:57:14Z")
[QUOTE=Fear Itself] I have thought about that since the last time you raised this issue. Do you have any evidence that square footage remained basically flat from the end of WWII until the mid 90’s? Because housing trading within a pretty stable range during that period. [/QUOTE] [Here are the stats from 1973 to 2005.](http://money.cnn.com/2006/07/24/real_estate/home_stretching/index.htm) > [@](#): > > The average new home grew to 2,434 square feet in 2005, according to the Census Bureau, up 3.6 percent from 2,349 square feet in 2004 and up 46.6 percent from 1,660 square feet in 1973. Further complicating the process of defining the “average house” is the boom in amenities: > [@](#): > > Back in 1973, reports the Census Bureau, 40 percent of all new homes had fewer than two baths. By 2005, 95 percent of them had at least two baths and a full 26 percent of them had three baths - or more. > > Kitchens may not be expanding in number, but they are definitely expanding in size. The compact 9-by-10 kitchens of the 1950s have given way to the current 285 square foot average, according to the NAHB… > > …And there are lots of different rooms that barely existed when Beaver Cleaver was growing up. Family and/or entertainment rooms, where everyone gathers around the hearth or projection TV, have made the old fashioned living room an afterthought… > > …Separate laundry rooms and butler’s pantries - replacing dank spaces in unfinished basements - are also high demand items for new homes. Few people had these facilities in the old days. > > Then there are the sleeping arrangements. Children are a lot less likely to share a bedroom then when your daddy - or even you - grew up… > > …Air conditioning has become well-nigh indispensable in the modern world, especially because so much of our population growth has occurred in the sun belt. Some 89 percent of all new homes now come with cooling systems, compared with less than half in 1973… And that’s to say nothing of all the Viking appliances, granite countertops and Kohler fixtures that have become so common of late. The chart linked earlier doesn’t adjust for any of these changes in the size and features of “average” homes. How much would the addition of granite countertops and air conditioning (had they been available) have affected the average home price in 1910? We don’t know. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [March 25, 2008, 11:40am UTC](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292/27 "2008-03-25T11:40:35Z")
Well, you certainly proved that houses have gotten larger since 1973. But your stats don’t go back far enough to tell if the run up in prices is due to the increase in square footage. Houses have been growing in size since the end of WWII, when when [the average size was 1100 square feet](http://sunhomedesign.wordpress.com/2007/12/03/how-our-homes-became-the-equivalent-of-gas-guzzling-hummers/). Between the end of WWII and 1994, home sizes grew over 90% to 2100 square feet, yet prices stayed within a range, with occasional booms. Why didn’t increasing home size affect prices then? And between 1994 and 2005, home sizes grew only 16%, but prices ran up a whopping 72% (according to my first graph). Clearly, there is more at work here than just supersizing McMansions. [Previous page](https://boards.straightdope.com/t/have-we-entered-the-low-point-of-this-recession/442292.md?page=1)