# 10 Signs We’re Not in Another Real Estate Bubble (Part 1)

1. Roy says:

“… housing starts remain almost 200% below the peak hit during the last boom. And they’re more than 60% below the long-term average since 1962. As far as existing home sales, we’re still about 40% below peak levels.”
Be Consistent and clear about the way you calculate and express relationships between numbers. If housing starts were 200% below the peak they would be negative, and counts can’t be negative. The peak might have been 200% higher than current levels, but that would mean that current levels are 67% lower than the peak (current/peak = 0.33). Always calculate the relationship in the same way as you express it (and vise versa) or the numbers you present could be just plain wrong. Your mistake on the housing starts comparison makes me doubt all of the other comparisons you quote. Are housing starts < 0.4 x the average (as you state) or is the average more than 1.6 x current housing starts (based on your similar misstatement of the comparison to the peak). Your words refer to a specific mathematical formula. That formula must exactly match the formula used to generate the number presented or the entire communication will be wrong.

Totally my error. I had the formulas in excel pointing to the wrong cells. I’ve updated the figures to make it clearer. Thanks for catching the error and more importantly, letting me know!

Best,

Lou

2. Dave says:

The extreme shortage of inventory in our area is putting lots of pressure on prices to rise. Locally prices are up 16% over last year. If the trend continues and at that high rate, a bubble we will have. No doubt Lou.