data from the last real estate bear market

I highlighted my favorite part of the article below:

the average house price in L.A. dropped from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent. . . . Furthermore, those are nominal prices, not real values. To calculate the loss more realistically you would have to figure in the cost of inflation: $222,200 in 1990 would have been worth $266,700 in 1996 dollars, which means the actual loss for homeowners buying in 1990 and selling in 1996 was closer to 34 percent. (link)

Wow! That's not a good sign. Now look at this chart below. I see a bubble that's 2-3 times as big as the 1990 bubble.

By the end of this year, I expect to hear a giant wooshing sound as the air comes out of the bubble. Don't forget reflexivity. When the housing bust causes a recession, that will lower incomes, so the base of the graph will sink as well.

Invest in commodities.