Tale of two different economies in the US
While many people on the two coasts have benefited from the increase in home prices over the last 20 years, other people living in the rest of the country have barely seen their home prices keep up with inflation according to this interesting New York Times story (registration required):
Homes in the areas that were already the most expensive — California and the Boston-to-Washington corridor — have often doubled or tripled in value, even after adjusting for inflation. The increases have created nest eggs for longtime owners and allowed them to borrow billions of dollars against their equity, financing new kitchens and college educations and keeping the current economic malaise from being far worse than it might have been.
But while the boom has become the subject of daily conversations among the middle class and affluent in New York, San Francisco and Los Angeles, people in much of the country have little housing bounty to tap for home improvements, retirement or other needs. From Fort Wayne to Rochester to Salt Lake City, the prices of typical homes across most of the country's vast middle have risen just ahead of inflation — and more slowly than incomes. The cost of homes in the most expensive cities is now about six times that in the least expensive, up from a ratio of three to one two decades ago.