Malkiel

Case-Shiller: Steepest Price Decline On Record

I'm still waiting for someone in academia or in some Wall Street back office to do the basic research and give the figures for the math that we all know underlies this: what percentiles of consumers make what incomes, and how many of them are in the market for housing? Because price and income are the related factors here, and price clearly got away from income, one would think it in the vital interest of many a party in this economy to know just where prices have to fall to for existing buyers to stop failing and new buyers to start buying. NAR seems to have acknowledged in a recent statement using their own calculations that 5x income is the realistic limit, and one has to believe based on statistics that few of the California homeowners nattering away on HGTV about the value of their $800,000 San Francisco row houses could really afford what they own, so who will crunch the numbers that count here? Why is it so hard to get economists to believe the simple relationship between price and income?