Decline is overblow says economist

[kev374]

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/03/AR2008080301572.html

Article is by a professor at Columbia University, he says that it’s highly improbable that home prices will decline over 5% in the next 2 years.

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[Bugs]

There are three authors, and two of them are professors at Witchita State. I can see why they don’t think the national averages (which are meaningless anyway) will decline by more than a couple percent.

They’re whining about Shiller counting an $800,000 home more heavily than the $100,000 homes. Well, bubba, when the $800k home loses 3% of it’s value that equals out to 24$ of the value of the $100,000 home, so yeah, it does have a bigger effect on our economy as a whole.

How much you wanna bet all 3 of these guys have side businesses performing “consulting” services?

[bubba99]

Aside from the obvious wrong conclusions – like prices cannot fall below . . %, and the analysis is too weighted to the bubble states, there may be a grain of truth to the article.

It may be true that in small Kansas, Montanta, etc. areas the fall in price may be very small. Clearly the big bubble states like Ca, Fl, Nv all have a long way to fall, but a $75k 2000 sq ft house in rural Kansas is pretty close to its economic cost and may retain a greater percentage of its value.

But so what. The economic engine that drove the economy for the last 8 years is Finance, Insurance, and Real Estate (FIRE) and this activity was centered in the bubble areas. The decline in the bubble areas will drag the whole economy with it.

[bubba99]

Aside from the obvious wrong conclusions – like prices cannot fall below . . %, and the analysis is too weighted to the bubble states, there may be a grain of truth to the article.

It may be true that in small Kansas, Montanta, etc. areas the fall in price may be very small. Clearly the big bubble states like Ca, Fl, Nv all have a long way to fall, but a $75k 2000 sq ft house in rural Kansas is pretty close to its economic cost and may retain a greater percentage of its value.

But so what. The economic engine that drove the economy for the last 8 years is Finance, Insurance, and Real Estate (FIRE) and this activity was centered in the bubble areas. The decline in the bubble areas will drag the whole economy with it.

[bubba99]

Aside from the obvious wrong conclusions – like prices cannot fall below . . %, and the analysis is too weighted to the bubble states, there may be a grain of truth to the article.

It may be true that in small Kansas, Montanta, etc. areas the fall in price may be very small. Clearly the big bubble states like Ca, Fl, Nv all have a long way to fall, but a $75k 2000 sq ft house in rural Kansas is pretty close to its economic cost and may retain a greater percentage of its value.

But so what. The economic engine that drove the economy for the last 8 years is Finance, Insurance, and Real Estate (FIRE) and this activity was centered in the bubble areas. The decline in the bubble areas will drag the whole economy with it.

[bubba99]

Aside from the obvious wrong conclusions – like prices cannot fall below . . %, and the analysis is too weighted to the bubble states, there may be a grain of truth to the article.

It may be true that in small Kansas, Montanta, etc. areas the fall in price may be very small. Clearly the big bubble states like Ca, Fl, Nv all have a long way to fall, but a $75k 2000 sq ft house in rural Kansas is pretty close to its economic cost and may retain a greater percentage of its value.

But so what. The economic engine that drove the economy for the last 8 years is Finance, Insurance, and Real Estate (FIRE) and this activity was centered in the bubble areas. The decline in the bubble areas will drag the whole economy with it.

[bubba99]

Aside from the obvious wrong conclusions – like prices cannot fall below . . %, and the analysis is too weighted to the bubble states, there may be a grain of truth to the article.

It may be true that in small Kansas, Montanta, etc. areas the fall in price may be very small. Clearly the big bubble states like Ca, Fl, Nv all have a long way to fall, but a $75k 2000 sq ft house in rural Kansas is pretty close to its economic cost and may retain a greater percentage of its value.

But so what. The economic engine that drove the economy for the last 8 years is Finance, Insurance, and Real Estate (FIRE) and this activity was centered in the bubble areas. The decline in the bubble areas will drag the whole economy with it.

[Author]

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