Chart of the Day recently provided this graph, illustrating the (inflation adjusted) U.S. median price of a single-family home over the past 40 years -- 1970 - 2010. Following the increasingly rapid increase that began in 1991 and ended in 2005, the U.S. median house price dropped by 35% from the peak. As Chart of the Day, points out, a home buyer who bought the median priced single-family home at the 1979 peak has actually seen that home lose 4.3% of its value. Not an impressive performance considering that over three decades have passed, Of course, this is a nation-wide median figure and does not reflect the fact that some regions or neighborhoods have seen dramatic appreciation over the past several decades--even after the dramatic price drops of recent years.
The current (2010) median price is still at the high end of the trading range that existed from the late 1970s when environmental restrictions first took hold in major coastal metropolitan areas. This suggests to me that there issome room for further price declines--unless we see some strong job growth in the very near future.