During 2006 and 2007 I worked on a thesis for Civil Engineer’s faculty from Barcelona’s UPC University. I presented it on February 2008.
2007 Catalunya’s house price prediction
In this thesis I created a mathematical model that predicted an imminent collapse of Catalonia’s (1) house prices and housing construction. That was not easy to say at that moment, as the model was contradicting all the experts, banks, government and IMF forecasts. Most of the experts said the prices were “sometime” going to “stabilize”. Just with that word, “stabilize”. The most definite economists “predicted” the prices were going to moderate it’s growth to stay parallel with general products prices increases. That was not so difficult to say when prices had been rising up at really high increases, around 15%, during the 10 years before. None of them dared to predict when was this stabilization going to start, and of course, which particular prices were there going to be in the future. Anyway, time has showed that all of them were wrong.
But that was not the only difficulty for my “insolent” predictions: since 1920, house prices in Catalunya had never gone down before, even after 1929 depression, Spanish civil war (1939) and World War II (see graphic). Why was I going to contradict all the experts and also the tendency of all the century before? Just because the mathematical model was so solid it couldn’t be in any other way: the prices were definitely going to go down, starting on 2008.
Catalunya region real house prices: you can observe prices had never gone down before, when I dared to predict in 2007 the historical change of tendency.
Canals Housing 