Fascinating analysis from Vladimir Klyuev analysts at the IMF, titled What Goes Up Must Come Down? House Price Dynamics in the United States. 

I found the charts at the end of the report particularly compelling -- they utterly demolish the calls for a real estate turnaround we heard last week from people who should know better.

Even if you do not want to accept the premise of the 4th chart's -- a mean reversion and overshoot -- the first three charts make it hard to argue that we are any where near a bottom.

>

Price Index, Single Family Existing Homes

>

Real Home Prices and Rents

>

OFHEO Purchase Only Price Forecasts

>

Home Price Simulations

 

 

Source:
What Goes Up Must Come Down? House Price Dynamics in the United States
Vladimir Klyuev
IMF, July 1, 2008
http://www.imf.org/external/pubs/cat/longres.cfm?sk=22179.0

IMF PDF
http://www.imf.org/external/pubs/ft/wp/2008/wp08187.pdf

What went up continues to go down
The Economist, July 26, 2008
http://www.economist.com/blogs/freeexchange/2008/07/what_went_up_continues_to_go_d.cfm