More than that. I was a renter in Manhattan 89-91 and 92-94 ... it was crazy then, but compared to today it was cheap. The same can be said for Berkeley: I was a renter 83-89 and again in 91-92. I finally bought a condo in 94 but should have in 85 :)
> Nationally, for the century before 1995, house prices on Shiller's
> reckoning only rose about 1% above the rate ofinflation.
First of all, a century worth of data is useless in this thread. But anyway, 1% makes a huge difference in the calculator you posted. The default value when you read the story is -2% (if you agree that "inflation" == "rent") which is unreasonable except in some short term scenarios.
> There's no reason why, over the long term, house prices should rise
> faster than incomes, is there?
You just said that it did! If rents are going up at inflation and home values are going up at 1% over that, you should buy a house as soon as you can after this event passes.
/jordan