I think they got the next 2 quarters wrong (or at least the current quarter), so how much would I believe them for 40 quarters from now ?
Actually I think they will probably be pretty close, say within 10%, although their trajectory is wrong IMO.
Their result is equivalent to assuming 3.2% annual compunded appreciation over the 10 years. This is likely to be a decrease in real dollars, due to inflation.
If we assume today’s prices are overvalued by 30%, their target number could be reached by ~ 6.9% annual appreciation. A bit on the high side, but not out of line with appreciaiton from bottom to tops of cycles.
Looking back to 1982 prices, their number is the equivalent of about 6.2% annual appreciation.
During the last two cycles prices doubled or tripled from peak-to-peak, so I’d say their final number is well within historical ranges and not too unrealistic in terms of appreciation rates relative to the last 25 years (ignoring the last 4).
I just think their curve is likely to be grossly wrong for the next couple years.
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