Hey Bugs, you’re a brainiac! If you took the time for the Professor Challenge, you could send it to newspapers, etc. In studies like this, the assumptions are crucial. You’ve outlined why their study is so flawed. I personally would have assumed a 10% annual decline. My conclusion would be to rent. This again goes to show that economists cannot be trusted just because of their title. I started a topic about economists we can trust: I figure anyone who didn’t warn about a housing bubble is not worthy of my reading. If these folks can’t see we’re in the biggest asset bubble in history, why should we read anything else they might say?
Of course, for the doubters, we must take the time to show the weakness in the paper. Bugs nailed it.