Figure 2
Projection for the price of new houses in the West of the United States: 2005-2011.
The
figure summarizes three of the four episodes shown in figure 1. The two downgoing phases are characterized by
exponential price falls with rates of the order of −6.5%. The projection was modelled on the same pattern. Note
that the precise moment of the downturn cannot be forecast in the same way because it depends on exogenous
factors such as interest rate levels or exchange rates. However, after the downturn one can expect a subsequent
5-year period characterized by a downward trend with a rate averaging about −6% per year.
Image and text courtesy: physics/0605133