I Have a Lot of Problems with You People!
Posted by Index Protrader Services at 12/31/2007 8:27 AM and is filed under Current Events and Timely news 
Paul Kasriel is the Director of Economic Research at Northern Trust. He points out the unique nature of today's housing market, i.e that housing prices never fell between 1968 and 2006.--Pro Trader
To get some idea how much the price of your house might fall, consider the implications of how much the price of your house has risen relative to your income. Between 1980 and 2000, the price of your house averaged about 337% of your income. Then, according to former Fed Chairman Greenspan, came the delayed effect of the fall of the Berlin Wall, and the price of your house soared to 469% of your income - a record high for the 1968 through 2006 period. Assuming, optimistically, that your income increases by 4.05% in 2007 and 2008, the rate at which your income increased in 2006, by what percentage would the price of your house have to fall from its 2006 level to get the price/income ratio back to 337% average in 2008? The answer is 21.7%. From 1968 through 2006, the median price of an existing home never fell on a year-to-year basis. So, we are in uncharted waters here.
Complete article at Safehaven.com
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The information that you have provided looks quite realistic. Many economist believes that the bubble of housing market has burst and it is quite hard to predict at which point the housing market will bottom out but looking at the present scenario it looks like the slowdown in housing market will continue more in 2008 also.
Mike
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I LIKE THIS POST.
CAN I POACH IT?
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I had no idea Kasriel had such a sense of humor
John Bougearel
successfultradingtips.com
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