All Intensive Purposes

Wow, this is really neat.  Thanks for reproducing this graph.

It's interesting that housing prices fell in the 1920s, and remained about the same through the Depression.  Almost like 1920s housing prices were predicting the onset of the Depression.

It's also interesting that the return of housing prices to "normal" occurred during World War II, not after it.

One thing I wonder about the spike at the end: Since the chart is adjusted for inflation, that spike could indicate one of several other things besides a big spike in housing prices:

1) Inflation is artifically low and will soon rise sharply to compensate.  (In other words, when your number is X/Y, and you see a big spike in your number, then either X is way too big, or Y is way too small.)

2) Our methods of measuring inflation for recent times is very inaccurate, and 10 years from now the chart will use different numbers and look somewhat different.

I think there are several things which could prevent a crash.  However, I think interest-only balloon mortgages coming due can't be easily sidestepped, so how well the housing market weathers the next two years will probably determine whether a crash occurs or not.