On Fri, 26 Jul 2002, Seth Ackerman wrote:
> 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 don't think that's right, because the 20% barrier seems to be phrased in terms of initial purchase price rather than beginning-of-the-boom market price. So in a bust, long-term residents whose homes had steadily appreciated could sell at a price that would be higher than what they paid and still be more than 20% lower than the start of the boom. And if I understand Brad's paraphrase of Shilller correctly, their bottom price would be 20% lower than they originally paid say 20 years ago -- which would be a lot lower than 20% below the start of the bubble.
Michael