Wednesday, December 28, 2011

Housing Prices - the real story...

Housing prices are just like any other market - highly symmetrical. In comparison to the flawed presentations of the prices in the graph at the bottom of this post…I propose a clearer view of what is plausible…if not likely - as I see the Ritholtz scenario as relatively unlikely and rather optimistic. Instead it seems to me that the unwind of commodities and hard assets like Silver, Palladium, Land and Real Estate will have MUCH further to fall and the rise in value of CASH will have much higher to rise than people seem to understand or able to imagine. I find the projection in the ritholz example to be highly unimaginative given the behaviour of prices on a percentage basis in the past. The key to understanding this is that most markets seek symmetry and in this case both the dollar and housing prices are in fact doing exactly that.

Below is the chart presented on the site which I think is rather in effective in telling the real story.

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