What is the New "Normal" in Housing Prices?

Ed Glaeser argues that housing needs to be viewed as a commodity like any other, rather than an investment.

1 minute read

January 10, 2010, 11:00 AM PST

By franny.ritchie


"Last week, Standard & Poor's released October figures for the Case-Shiller housing price index. The quite modest gains seem to have caused some consternation, but housing markets are doing exactly what we should expect them to do.

"There is no reason to expect a big post-slump jump, and every reason to expect that prices and construction levels will continue to muddle along for quite some time. Don't expect prices to return to their boom levels for years, if not decades."

"In much of America - Dallas, Houston, Phoenix, Las Vegas - price should remain tethered by construction costs. Land is abundant. There are few regulatory limits the building. The price of a house should be close to the cost of building a house.

"After the brief insanity of the 2003-06 period, prices in these places seem to have returned to the costs of development, and that is where we should expect them to stay. Some places, like Dallas and Houston, remained at construction costs throughout the boom."

"There is more to like in low housing prices than in low levels of building. After all, a weak construction industry will help keep unemployment high. But it's going to take years to work through our housing glut, and during this period, stability is the best we can hope for."

Thanks to Franny Ritchie

Tuesday, January 5, 2010 in Economix Blog

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Use Code 25for25 at checkout for 25% off an annual plan!

Redlining map of Oakland and Berkeley.

Rethinking Redlining

For decades we have blamed 100-year-old maps for the patterns of spatial racial inequity that persist in American cities today. An esteemed researcher says: we’ve got it all wrong.

May 15, 2025 - Alan Mallach

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

May 14, 2025 - Diana Ionescu

Front of Walmart store with sign.

Walmart Announces Nationwide EV Charging Network

The company plans to install electric car chargers at most of its stores by 2030.

May 7, 2025 - Inc.

Close-up on white bike helmet lying on pavement with blurred red bike on its side in background abd black car visible behind it.

Michigan Bills Would Stiffen Penalties for Deadly Crashes

Proposed state legislation would close a ‘legal gap’ that lets drivers who kill get away with few repercussions.

15 minutes ago - Wood TV 8

Muni bus on red painted bus-only lane in downtown San Francisco, California.

Report: Bus Ridership Back to 86 Percent of Pre-Covid Levels

Transit ridership around the country was up by 85 percent in all modes in 2024.

1 hour ago - Mass Transit

Interior of Tesla car with dashboard.

Federal Regulators Ask Tesla for Robotaxi Details Ahead of Planned Launch

Tesla CEO Elon Musk says the company will launch self-driving taxis in Austin in June and other U.S. cities by the end of the year.

2 hours ago - Smart Cities Dive