Where Will Housing Prices Go Next?

Where Will Housing Prices Go Next? How long will it take for home values to zoom back up. Some prognosticators predict decades. Others say there is a brighter picture."We will never see these prices again in our lifetime, when you adjust for inflation," says Peter Schiff, president of investment firm Euro Pacific Capital of Darien, Conn. "These were lifetime peaks."But Wachovia economist Adam York expects home values to recover fairly quickly, beginning in 2010. "The one saving grace is the population is growing by 3 million people a year," he says. "They need to live somewhere. That means more roofs."You be the judge, Here are some historic measures:Rent. In the last half century, homes have on average sold for 20 times what it costs to rent them for a year. In 2006, at least in some places, they were selling for 32 times annual rent.Income. From 1950 to 2000, home values sold for three times average household income. In 2006, average household income was $66,500, which should have put median home prices at $200,000. Instead the median was $301,000.Appreciation. Existing home values rose 0.5 percent annually, adjusted for inflation, from 1950 to 2000. From 2000 to 2006, they rose at the annualized rate of 8.2 percent above inflation and peaked with a 12.3 percent rise in 2005.Source: USA Today, Dennis Cauchon (12/12/2008)