Housing goes exponential

Ever since the housing bubble burst (and took our economy with it), debate has raged as to whether prices have "bottomed out". With regard to the aggregate, my honest opinion is that I don't know. My best guess has been (and continues to be) that certain markets are oversold, while others have room still to go. Charts like this one (courtesy of the Zero Hedge blog) do an excellent job of illustrating why I feel that way.

It's striking to see how absurdly high the very top end is above the rest of the curve. That to me looks like something that's just begging to get a haircut.

Also of note is the list of top 10 "richest" markets in the nation, as ranked by average home price (they are also the only 10 that clock in at over $1 million).

1. Newport Beach, CA         $1,826,348
2. Palo Alto, CA                     1,479.227
3. Rye, NY                             1,325,550
4. San Francisco, CA              1,325,103
5. La Jolla, CA                        1,210,300
6. Greenwich, CT                    1,195,614
7. Wellesley, MA                     1,080,458
8. Pasadena, CA                     1,043,683
9. Honolulu, HI                        1,026,821
10. Santa Barbara, CA            1,024,661

Big shout out to my hometown of Wellesley...I had no clue it would still be up there. Note that 6 of the top 10 (and 12 of the top 17) markets are in California. Take this how you will, but with that state's budgetary situation as dire as it is, a haircut to the top end of the housing curve could be devastating. We shall see...

[Zero Hedge]