They lead off with the scary picture:
Though I would note that this is now almost 6 month old data, so there would be a lot more red now.
They make the obvious point, that the delta in house prices is still not clear, with a number of different ways of measuring, with OFHEO covering sales financed by the GSEs, and the two different Schiller numbers.
Note that the gray area is projected, and I think that they ignore the possibility of overshoot in the buy/rent ratio.
They note the fact that banks are still tightening standards at an unprecedented rate, which will push house prices down, but they neglect to mention that the 5-6% fixed rate mortgage is historically low, and that if there is a return to the 9% rate, we would see even further downward pressure.
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