I see your original argument. The problem is one of supply and demand. Even if the houses are supposed to be worth $500K (based on your analysis) but no one can buy it because we are paid in dollars (not euros) and because the bank won’t let anyone borrow, then the price has to go down.. or there wont be any transaction, either scenario is more likely than houses being sold at $500K.
also, you pick monetary metrics that supports your arguments. can’t we pick #shares of GM or Countrywide per housing unit cost. Why pick euros instead of dollars when dollars IS the currency in the US of A?
heck, if I really want to support your thesis, I’d pick shares of Google for my monetary metrics. Housing value is 30% what it should be right now!!!
