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Housing Prices could go down, down,

it would seem that a sequence of price declines continuing for
many years has some substantial probability of happening.

Traditional finance theory has trouble reconciling even a semi-predictable
sequence of price declines with basic notions of market efficiency. The
situation we are facing is a reminder of the glaring inefficiencies and
incompleteness of existing markets for residential real estate, and
may be regarded as evidence that institutional changes will be coming
in future years to fundamentally change the nature of these markets.

Things That Go Boom
February 8, 2007; Page A15


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