Volt you state "US housing prices are so far above the "real" norm that a further 50% drop would be just median and 75% would be typical of an overshoot below after the biggest bubble in history."
I totally agree. Just a question. Having lived in both the USA and Oz, i personally think the Australian bubble is much worse. when I compare US Condo prices to Units in Oz it blows my mind. IMO Oz Units are the bubble of all bubbles. But I digress.
We have all the ingredients for a massive bubble; incredible price growth beyond any historical norm, loose credit (prior to present), government intervention in the market (FHOG), rising unemployment, Unattainable/unaffordable prices for new participants, an investor bubble...i could just go on. 348 years of data via the the Herengracht index tell us inflation adjusted, homes should rise around 1.5%pa. What have we had in Oz since 2000?
I guess we can try and inflate our way out or future generations will enjoy a lower standard of living. Personally i think nature always corrects imbalances. What do you think?
