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FHFA NJ State HPI (Real) and FHFA NJ HPI / Income

700 10

NJ HPI / Median Household

9
600
FHFA NJ State HPI

Income
500
7
400
6
300
5

200 4
75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 20 23

FHFA NJ State HPI Real (09 Adj) HPI / Median Income

Note: Shaded Blue area is projected data

• This projection assumes that the 2000’s Real Estate bubble will deflate in approximately the same manner as the 80/90’s housing bubble.
The difference in magnitude of the % growth form trough to peak was calculated as 1.25X and the difference in the length of the growth
phase of the 2 bubbles was 1.7X. That is the 80’s/90’s bubble inflated 116% trough to peak and the 2000’s bubble inflated 145% trough
to peak. The 80’s/90’s bubble saw a 27% decline from its peak to its bottom over a period of 9 years. The % decline was scaled by 1.25X
and the period fo decline was scaled by 1.7X in order to generate the scenario for the 2000’s Real Estate bubble collapse. The scaling
used generates a peak to bottom decline of approximately 35% for the 2000’s bubble with a period of decline lasting 15 years
• For HPI/ Income calculations it was assumed that income would be essentially flat for the period covered.