I posted the link without analyzing it thoroughly, or at all, and if the guy made some mistakes in his assumptions, I appreciate the time you took to figure it out.
As I said, my reason for a 50% correction is simple: all excesses correct and overshoot on the way to the mean. We are several standard deviations removed from the mean, when you compare housing prices to rents, or to incomes.
To return to the mean, as measured by rents or incomes, we need a 50% correction.
A great visual is the chart in the Bubble Primer. Some people think wages will come up to soften the lower home prices. This is a possibility,but based on global wage dependence, pretty unlikely at this point.
House prices are already down 10% in some areas, and we haven’t even got into the 2007 massive ARM resets yet.
Please don’t think that the article I posted was to prove any point. I found it interesting, and its lack of accuracy does not change my prediction.
