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Old 05-13-2009, 10:13 AM
 
1,983 posts, read 7,523,040 times
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Quote:
Originally Posted by BobKovacs View Post
"Fair" based on what?
Email the professor if you have questions. I didn't do the study.
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Old 05-13-2009, 10:56 AM
 
612 posts, read 1,011,753 times
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Quote:
Originally Posted by MoorestownResident View Post
Chart 35 show how significantly undervalued the hottest markets now are - as much as -35% undervalued. The rest of points are irrelevent. The inflation adjusted index on slide 22 to the 80s trend line is within normal statistical standard deviation and drives home the point that homes are fairly valued relative to the long term trend in inflation adjusted prices. In addition to that, and more importantly, the trend line was signficantly BELOW the longer term trend for TEN YEARS prior to the boom. The boom in the mid-atlantic was partly a reversion to the mean from the 80s fallout, the 87 market crash and the 90-91 recession.
Rofl, so you look at that graph and conclude that real estate is where it should be right now because the red line hit the black line? Not for nothing but did you look at how prices dipped below that line? They went far below and remained there for over a decade from about 1991 to 2003.

But regardless, there's nothing magical about the year 1983 that you should start your analysis there. Why not 1993? Given that the price difference from the last housing bust appears to be around 25%, any starting point you pick would given a margin of error of 25%. So with this heavily flawed analysis, you can conclude that housing prices have found there value, with a margin of error of 25%. Given that every market force in play is basically negative, it doesn't look so good. Btw...even if you were right that housing has found it's market price...ever hear of over correction?
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Old 05-13-2009, 11:08 AM
 
1,983 posts, read 7,523,040 times
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Talk to the professor at Wharton. He did the analysis and put forth the conclusions. It is there is color and black and white. Yes, the market might very well over-correct and that is the stage it is in IMO.
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Old 05-13-2009, 11:08 AM
 
79 posts, read 127,729 times
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Quote:
Originally Posted by MoorestownResident View Post
Chart 35 show how significantly undervalued the hottest markets now are - as much as -35% undervalued. The rest of points are irrelevent. The inflation adjusted index on slide 22 to the 80s trend line is within normal statistical standard deviation and drives home the point that homes are fairly valued relative to the long term trend in inflation adjusted prices. In addition to that, and more importantly, the trend line was signficantly BELOW the longer term trend for TEN YEARS prior to the boom. The boom in the mid-atlantic was partly a reversion to the mean from the 80s fallout, the 87 market crash and the 90-91 recession.
Which chart do you mean? Slide 35 clearly shows that foreclosures in Philadelphia are rising YOY, which doesn't seem to have anything to do with your statement. If that was a typo... well, slide 25 doesn't say anything about 35% undervalued either, and nor does 15. Where are you getting that number? What do you mean by "undervalued?"

The trendline also takes into account the bubble, and even with that it still has distance to fall. If you wouldn't mind addressing all the other slides showing an unsustainable situation, I would appreciate it - you seem quite confident that they are irrelevant, but have provided no supporting logic or evidence.

It sounds like you are basing your entire position on the conclusions of IHS Global Insight, despite a total lack of support or transparency for those conclusions. Is there some other support for your claim beyond simple acceptance of what IHS Global Insight said?
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Old 05-13-2009, 11:13 AM
 
1,983 posts, read 7,523,040 times
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Talk to the professor at Wharton if you wish to challenge his data and/or conclusions. Small increases in foreclosures mean nothing. It is not relevent. What is relevent is the huge increases in other markets over the same time frame, that is the point of the analysis - that the Philly market is not anywhere near as stressed as others.
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Old 05-13-2009, 11:17 AM
 
Location: Montgomery County, PA
2,771 posts, read 6,280,072 times
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Quote:
Originally Posted by MoorestownResident View Post
Talk to the professor at Wharton. He did the analysis and put forth the conclusions. It is there is color and black and white. Yes, the market might very well over-correct and that is the stage it is in IMO.
Maybe you should talk to the prof. You're on here arguing that prices are "fairly" valued, but your only basis for that claim is that some prof cited something from "IHS Global Insight" that said that this was so.

I say the claim is nonsense, and have provided plenty of data showing that current prices are out of line with historical norms.
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Old 05-13-2009, 11:17 AM
 
612 posts, read 1,011,753 times
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Quote:
Originally Posted by MoorestownResident View Post
Talk to the professor at Wharton if you wish to challenge his data and/or conclusions. Small increases in foreclosures mean nothing. It is not relevent. What is relevent is the huge increases in other markets over the same time frame, that is the point of the analysis - that the Philly market is not anywhere near as stressed as others.
Stress is stress. That's like concluding your car is fine because you only have 2 flat tires while your neighbor's has 3.
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Old 05-13-2009, 11:17 AM
 
79 posts, read 127,729 times
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He did not present any conclusions to challenge. He presented a set of data and the conclusions of IHS Global Insight. You are deriving conclusions from a set of data presented by him, and choosing to believe the conclusions of IHS Global Insight. I am asking you to justify the conclusions you have drawn, and justify your belief in IHS Global Insight's analysis - I have presented my own reasons for skepticism and my own analysis, and you have simply brushed them off without any reasoning, evidence or logic. That's hardly the stuff of good discussion.
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Old 05-13-2009, 11:24 AM
 
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Whatever you want to believe, believe dude. Means nothing to me. The analysis is spot on. However, I would use caution assuming his data holds for northern NJ. His focus is Philly.
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Old 05-13-2009, 11:26 AM
 
1,983 posts, read 7,523,040 times
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Quote:
Originally Posted by elflord1973 View Post
Maybe you should talk to the prof. You're on here arguing that prices are "fairly" valued, but your only basis for that claim is that some prof cited something from "IHS Global Insight" that said that this was so.

I say the claim is nonsense, and have provided plenty of data showing that current prices are out of line with historical norms.
I am arguing that Philly metro is fairly valued, I am not arguing northern NJ is fairly valued as of right now. His focus is Philly, not spots closer to NYC.
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