It was my impression that houses have gotten a lot bigger over the past 20 years. I do not think price per square foot is an accurate measurement now. In fact, it might even be skewed further in a cheap peak oil environment: Bigger house = higher energy expenses = less money for a big, fancy mortgage. The supply of wacky mortgages as gone down too. I expect that graph to overshoot by a lot, especially over the next 2 years. If there is any justice left in this country, I want to get a cheap house.