If what I’ve done is correct, then as you can see from the above graph, prices in Marin do in fact fall and have done so in a big way on at least four occasions since 1969. The largest price fall was roughly 20% and the quickest price fall was within a single year.
So I asked myself the question “Is it really true that single family house (SFH) prices in Marin don’t drop?” The existence of inflation makes answering this question difficult — something today will cost more in terms of the absolute number of dollar bills you have to pay for it than what that same something cost during a previous year. So what I did was to take each year’s mean house price in Marin County, adjust it for inflation to what it would be in terms of 1969 dollars (the earliest year for which I have SFH price data), and then normalized all of the resulting adjusted SFH prices to the 1969 price level. Unfortunately, the government-reported core inflation rate is highly suspect of late (if you want to read about how wonky is the calculation of the Consumer Price Index, then search this blog for the relevant articles as it does a most excellent deconstruction of the CPI). Also, I am not a financial analyst or anything like that so if what I’ve done is conceptually flawed in some way, please forgive me and please tell me how to do it right. But this seems to make sense. Below is the result: