Debt Deflation

[Seth Ackerman]

Brad DeLong wrote:

> Bob Shiller says that in America nobody can ever face selling a house
> for less than 80% of the maximum they thought it was worth, so
> whenever housing prices in an area drop 20% below their previous
> peak, they stop dropping, and instead volume of transactions drops to
> near zero...

That's weird. If it's true it means there's a structural asymmetric bias to
housing prices, since during a boom there's obviously no 20% ceiling to
price increases, yet in a downturn there's a 20% floor to price drops.

I wonder how many years of data this is based on.

Seth