The chart below is taken from GlobalInsight’s House Prices in America Qtr2 2007.
NOTES:
- Price corrections are defined as declines of at least 10 percent over a period of at least 8 quarters.
- Seventy-nine price corrections are observed over the past 22-year period and are ranked by starting date.
- The median, or typical, price correction is 17 percent.
- The median, or typical, degree of overvaluation prior to a correction is 33 percent.
- The median, or typical, duration of a correction is 18 quarters.
- The more severe the overvaluation, the greater the subsequent declines tended to be: correlation = +0.25
- The more severe the overvaluation, the shorter the duration tended to be: correlation = -0.31
September 22, 2007 by Realtor John Wake
John Wake
Born in Phoenix, trained as an economist and now a licensed Realtor, John uses hard data from the real estate market to help his clients -- buyers and sellers of residential real estate -- uncover their best choices for finding the right home or finding a buyer for their current home.
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