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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (28203)	3/16/2005 1:04:34 AM
From: John Vosilla	Respond to of 306849

The graph shows that in real terms we have seen two declines since 1980. The first decline, in the early '80s, lasted 3 years. The second decline, in the early to mid '90s, lasted 6 years. Makes sense then that the next bust will be 9 years... And this after 9 years of recovery assuming we make it through 2005 in the plus column.

To: CalculatedRisk who wrote (28203)	3/16/2005 7:40:58 AM
From: Wyätt Gwyön	Read Replies (3) \| Respond to of 306849

CR, thanks for that excellent analysis. one interesting thing is that while it took 6 yrs for the market to bottom, it only took 3 yrs, i.e. half the decline time, to make it back to breakeven (in nominal terms). this is the opposite of what one hears about the stock market--that declines are faster than rises because "fear is more powerful than greed". regardless of whether that hoary maxim about "the market" is true, there do seem to be some peculiarities about the RE market, as you noted, in terms of its being "sticky downward". perhaps another reason for this "property" of the RE market is the tendency for people to be in denial about the existence of a down market, combined with the liquidity dry-up. since so many people are employed in RE these days, i must wonder if the lack of liquidity will itself be a major contributor to the crash at some point. is RE now California's most important "industry"? btw, CR, do you know if those CPI figures you used to get the 26% real decline include food and energy?