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The key points that can be extracted from this ratio are that: 1) Housing values in aggregate became grossly overvalued by 2006 by a much larger margin than any time dating back to 1945 and 2) A correction in aggregate housing valuation had to take place, with declines back to "normal" levels Figure 2: Aggregate Residential Housing Values compared with GDP In order to arrive at a quantitative measure of what constitutes reasonable real estate valuations, we divide the aggregate household real estate in the U.S

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Size:Medium 6-8

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