Thursday, August 26, 2010

Pestov: Summer Update

Back in March, Alec Pestov came out with an in-depth analysis of the Canadian housing market. The original paper explored the subject of a possible housing bubble in Canada and examined a diverse array of factors that may have contributed to the rise in house prices.

Pestov concluded that market fundamentals had become insignificant in affecting house prices, and that price-momentum conditions characteristic of a bubble now exist. Pestov proposed that the extreme decoupling of the market prices from the underlying fundamentals suggested a correction in housing prices in Canada was coming.

Pestov has just completed the follow up to his original report.

Quoting Pestov, "This second edition of the report is the first of the semi-annual sequels for the original paper to provide timely updates on the state of the housing market in Canada. This document introduces a structure of the semi-annual releases, and your comments and suggestions regarding it are always welcome."

You can read the latest report here.



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