Floyd Norris points to fascinating stats from the latest set of data from the S&P Case Shiller 20-city composite index (for single family homes). It reveals that during the period, from June 2001 through the June 2009, in real terms home prices have taken a round trip and got back to where they started out from. This period can be separated into two parts - the five-year boom (when home prices outpaced inflation by 10.7 percent a year) and the three-year bust (when they trailed inflation by 13.6 percent a year).
More graphics from Calculated Risk (via Paul Krugman) also appears to point towards much the same. The Case Shiller price-rent ratio is back to where it was in 1987. Almost similar is the story with the real home prices index which too appears to be back to where it started off eight years back.
However, despite all talk of home prices bottoming out (due to a small June upturn), as the graphic above indicates, CR feels that real house prices, in general, are still significantly above prices in the nineties and will decline another 10% to 20%.