A Pet Peeve In Financial Media Reporting

In Laguna Beach, California, there are homes that sold for $172,000 in 1956. By 2018, many of them traded in the $2.5 million to $4 million range ($2.84 million as the median). And yet, the worst recession that affected these home values occurred in 1973-1974, when then the 1972 peak of $232,000 crumbled such that the average home price in Laguna Beach became $145,000. If the equity in your Laguna Beach home was a meaningful percentage of your net worth, it was the most noticeable hardship to hit the California real estate market in American history, excluding the Great Depression.

We are talking about two decades of negative compounding, and a peak-to-trough percentage change of 37.5%. That $87,000 swing was the worst destruction in fair market value wealth in the Laguna Beach real estate market in three quarters of a century.

And the past year, there was a point when … Read the rest of this article!