Calgary Misery Index – A Reason For Optimism in The Housing Market September 23, 2008Posted by DustinRJay in Calgary real estate, inflation.
Tags: Calgary real estate, inflation, misery index, unemployment
The misery index is a commonly used as a metric for stagflation. Stagflation is a combination of high unemployment and high inflation. High inflation and low unemployment rates created sharply rising house prices in the Calgary real estate market during the period from 1973 – 1983. In 1983, rapidly rising unemployment caused inflation levels to cool significantly, and house prices to fall. Again in 1990, upward trending unemployment rates caused house prices to stay flat for roughly 8 years.
In general, the following conditions are supportive of real estate growth:
- Low unemployment
- High Inflation
The following graph illustrates the relationship between inflation and unemployment to house prices: