The Blue line is the current S&P Case shiller for LA updated to February 2008
The Pink line is my prediction of house prices behavior from now to about 2012
The yellow line is the housing Bulls prediction of house prices behavior from now to about 2012
The pink line assumes that the unavailability of stated income loans, Option ARMS and stated second mortgages will simply decrease the number of qualified buyers to such a point where over correction would occur, then after getting to some support level by wages, market will flatten and start increasing at the rate of inflation.
The yellow line assumes we have hit bottom, and not going to be flat or start appreciating again....
Now, you tell me, who do you think is right?
2 comments:
The Pink line looks accurate and tracks my own thoughts based on what I've read.
AS we go, the pink portion will become "blue" and therefore track the actual price index.
As i was saying, my prediction thus far was surprisingly accurate. I'm saying surprising since i estimated the down will be "slower" and would take longer time.
However, when you think about it, by eliminating the mortgage product that enabled all these people to buy, you essentially cut the qualified buyers and thus cut the price proportionally.
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