Wow. Take all the above projected (and traded) expected housing price collapses for these US markets, and then also factor in the ravages of inflation, and this thing is gonna get sick. Like it's not sick enough today. Suzannnnneeeee!!!!! But hey, no surprise for HP'ers.
Earlier this week, the Chicago Mercantile Exchange (CME) extended the futures market on the S&P Case-Shiller Home Prices Indexes from one to five years. Now, futures investors can make bets on where home prices will be as far out as 2011.
For all of you who think a 15-25% pullback in the real estate market can't happen, I suggest you take a look at the CME pricing Web site.
As a point of emphasis, remember that these are priced in actual dollars and do not take into account inflation. Factor in 3% annual inflation and the real value of these homes falls a further 11.5% by 2011, putting prices in Miami and San Francisco down 37% and 36% respectively on a real-dollar basis. Who said house prices never fall...