Partypup, you write that you are “flabbergasted that the author thinks that a return to 2001 prices is out of the question.” I’m not certain who “the author” is in this case, but if you mean me (as the author of the post that started this thread), then I would point out that I said no such thing in my posts. I said that such predictions lack a foundation in the historical data.
You say that the situation we face is “completely unprecedented in the modern financial world” and that “Gauging the impact of the coming housing crash based on past downturns will be of no use this time.” So it seems that you consider the past data to be of little relevance.
Regardless of how relevant you think the past is, you should avoid making false statements about it, such as, “But prior to 2001, we had seen steady 5 – 7% appreciation.” Appreciation in San Diego was far from steady. Instead it showed considerable up and down swings. Here is the year-to-year average appreciation from 1987 to 2000 (from the Case-Shiller Index data):
Perhaps this downturn will be much worse than any prior one. Perhaps not. Either way, I can say with confidence that generalizations about impending economic collapse combined with falsities about historical appreciation are not going to convince me of it.
