bostonbubble.com

news · Joined: 14 Jul 2007 Posts: 0 Location: Greater Boston

Use this forum thread to discuss the following link.

Description: Reflecting on big busts from New England and Japan, and projections for Massachusetts
URL: http://paper-money.blogspot.com/2008/01/almost-daily-2-reflecting-on-real-big.ht ...truncated...
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=1378

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JCK · Joined: 15 Feb 2007 Posts: 559

The author could just as easily use his data to argue that the worst of the (nominal) declines are behind us, as we're getting pretty close to his dotted line. But it's a nice graphic presentation.

My critques:

The dotted line 2.5% line is pretty arbitrary, as are some of his statements:

"To date, prices have only come off 3.5% so more downside seems inevitable."

OK. Totally conclusory statement. I don't know why past decline should have any bearing at all what to expect in the future. Is there some real reason why nominal prices couldn't go level for 5-6 years? This is about as meaningful as the Realtor mantra of "housing prices never go down."

Then:

"Consider for a moment that with the complete 16.8% decline, nominal home prices would simply revert back to where they stood during Q4 2003."

What should the nominal prices fall to? I'm not sure. But it seems like this guy has modeled the data, finds he doesn't like the conclusion, so he starts arguing with it.