Annotation: With all the confidence in the world, this article headlines "One-in-three odd of housing falls." The article details a recent report by PWC where the consultants used a monte carlo simulation by "marrying future prediction of house price growth with analysis of how the market has behaved in the past.
That's all? Only a 33% chance of housing falls? This topic spans multiple classes and discussions. First off, it looks like the prediction is based on a certain type of distribution from the past. I took it upon myself to test out some of the data and see what a distribution of various types of pricing related to property would be via US governement statistics. What I noticed was that although a distribution for the increase in US mean housing data is somewhat linear, the mean housing values for some of the more economically challenged states is more expotential. So, I thought about what the 33% could be referring to? Is that to all citizens or are the people deciding to take a risk on the housing falls actually have a lot less of a change because they live in a more linear area?
Here is another article discussing the correlation between income and median housing prices. http://seekingalpha.com/article/56570-what-should-today-s-median-housing-price-be
Then I thought, well thank goodness we now have wikipedia to tell us the truth about what this "housing bubble" really is http://en.wikipedia.org/wiki/Housing_bubble
And to question even further that there is only a 33% chance that housing values will fall, I found the graph which started all this (see top) which illustrates how unforunately the trend has not been linear and expotential price increase should be correlated to possibity for decrease in their next simulation.
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