Recent Blog Posts
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The Year in Research
Dec 31 20089:13 am EDT -
Mind Your Value Judgements
Dec 19 20087:52 pm EDT -
S.E.C. Short-Sale Ban: Pretty Much Useless
Dec 19 20083:45 pm EDT -
Advice from Japan: Don't Forget TARP 1
Dec 19 20082:31 pm EDT -
Chart of the Day: Money Market Stress Easing
Dec 18 20088:57 pm EDT -
House Price Bubble Deflated?
Dec 18 20085:57 pm EDT -
Where Were the Whistleblowers?
Dec 16 200811:03 pm EDT -
It's Just a Recession
Dec 13 200810:20 pm EDT -
Comparing American and European Unemployment Insurance
Dec 12 20087:46 pm EDT -
Back to Normal?
Dec 11 20084:33 pm EDT
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House Price Bubble Deflated?
Interesting set of charts from a presentation by Columbia's real estate guru Chris Mayer showing house prices relative to 50-year trends:
It looks like there is a bit of mean-reversion going on here, but two factors make Mayer think that there could be an overshoot: Excess housing supply and the high spread between 10-year Treasuries and 30-year mortgage rates --2.52% now versus 1.6% historical.
As Mayer and Hubbard said in their WSJ op-ed yesterday, the solution they like is the one proposed by the Treasury: lower mortgage rates to spur demand. But not everyone thinks that's a good idea. (Mayer and Hubbard's paper.)
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