TY  - JOUR
AU  - Hendershott,Patric H.
TI  - Are Real House Prices Likely to Decline by 47 Percent?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3880
PY  - 1991
Y2  - October 1991
UR  - http://www.nber.org/papers/w3880
L1  - http://www.nber.org/papers/w3880.pdf
N1  - Author contact info:
Patric H. Hendershott
Fisher Hall
Ohio State University
2100 Neil Avenue
Columbus, OH 43210
Tel: 218/963-1393
Fax: 218/963-9484
E-Mail: hendershott.2@osu.edu
AB  - Mankiw and Weil have estimated a demographically-driven real house price equation on annual data from the 1947-87 period and used it to forecast real house prices over the 1988-2007 period. The result is their infamous 47 percent real decline. Their equation really only fits data from the 1950s and 1960s. Not only is the post 1970 fit poor, but the cumulative in-sample forecast for the 1970-87 period is off by a factor of four. While real house prices seem more likely to decline than increase over the next two decades, the most likely decline is 10 to 15 percent, not 47 percent.
ER  -