Strangely enough - more I talk to people about the housing market and more I get statement such as "the market is behaving normally", "I told you so, price are going higher". Of course, for not a moment, they think that price could stop from going higher or claim that if price were to adjust lower (be it, a single or half digit drop - they can only assume that as a temporary phenomenon, since price will, undoubtedly, resume higher -as they have always done). In addition, the most sceptical of all, will think that housing could correct, however deep downtheir heart (maybe brain too), they do not believe in that scenario for a second.Now - Without being the one trying to ruin the party - it's time to remind that we are really in unchartered territory with regard to the economy as a whole and to the housing market in particular. A bit like when water reach the boiling point, any solid argument in favor of a sound economy and robust markets (stock and housing) can be pulverized into nothing... actually as a sign, all the digits of 100 degres celsius appear in the yeat 2010 (at this moment you should hear in the background a soft and delicate music to make it a bit like melodramatic)
Right - Let's go to the point - by having a fresh look at the chart above, the housing market chart as produced by statistics Finland, you suddenly notice a very strange phenomenon. a V shape (in some culture it's pretty vulgar, in some it's a sign of victory... for me it's the sucker smile ...)
So- How can price could go down and up so fast? after all, unemployement didn't shoot up in a matter of a quarter, in the same line employement didn't resume upward in the meantime. On top of that, there was not - yet- a massive wave of selloff and banks were and are still lending.
I have some idea, but I ask you what could explain this sudden drop and rise? this could be the key on when the trigger that will lead to double digit historical correction that will dwarf any other housing crashes.
