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.
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Price Index, Single Family Existing Homes
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Real Home Prices and Rents
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OFHEO Purchase Only Price Forecasts
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Home Price Simulations
Source:
What Goes Up Must Come Down? House Price Dynamics in the United States
Vladimir Klyuev
IMF, July 1, 2008
http://www.imf.org/external/pubs/cat/longres.cfm?sk=22179.0
IMF PDF
http://www.imf.org/external/pubs/ft/wp/2008/wp08187.pdf
What went up continues to go down
The Economist, July 26, 2008
http://www.economist.com/blogs/freeexchange/2008/07/what_went_up_continues_to_go_d.cfm
Monday, July 28, 2008 | 06:30 AM | Permalink
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Comments
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.
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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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