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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: John Vosilla who wrote (82006)5/22/2007 5:35:23 AM
From: Mike Johnston  Read Replies (2) of 110194
 
John, where do you see down 40% ? Except some condos sold at auction at such a discount, my understanding is that prices are down in most overvalued markets only around 20-25% from the peak.

Still i would not call it a crash. If a house quadruples in price during a bubble and then declines 25%, the end result is still a triple.

Money supply growth rates approaching 15% and possibly 20% ( who knows what the exact numbers are ) and sharply negative interest rates, will limit any correction in housing on average to down 15% and down 30% in most overvalued markets.
After that, the prices will flatline for a few years as very high levels of inflation cause general price level and incomes to catch up with inflated house values.
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