IMF Report: Housing still way overpriced
Fascinating analysis from Vladimir Klyuev analysts at the IMF, titled What Goes Up Must Come Down? House Price Dynamics in the United States.
I found the charts at the end of the report particularly compelling -- they utterly demolish the calls for a real estate turnaround we heard last week from people who should know better.
Even if you do not want to accept the premise of the 4th chart's -- a mean reversion and overshoot -- the first three charts make it hard to argue that we are any where near a bottom.
Price Index, Single Family Existing Homes
What Goes Up Must Come Down? House Price Dynamics in the United States
IMF, July 1, 2008
What went up continues to go down
The Economist, July 26, 2008
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That these graphs are not on a logarithmic scale makes me suspicious. The first one in particular sure looks like a plain old exponential growth which is exactly what we should expect to see.
It's an old trick to graph normal exponential growth on a linear scale and point to the recent history and say it's out of whack with the long tail.
BR: Out of whack with the long tail? WTF? Do you have any idea what the Long Tail is?
Posted by: Gerg | Jul 28, 2008 7:19:15 AM
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