Final answer:
The regression of price on the size of homes in Albuquerque involves using the size of homes as the independent variable to predict home prices, the dependent variable. Historical housing market trends show significant fluctuations, including an unsustainable growth rate from 2003 to 2005.
Step-by-step explanation:
The question about the regression of price on the size of homes in Albuquerque pertains to a statistical analysis often used in real estate to understand how one variable, such as the size of homes, influences another variable, namely the price of homes. In this regression analysis, size is the independent variable (x) and price is the dependent variable (y). Such an assessment would involve collecting data on home sizes and prices and using it to fit a statistical model that can predict price based on size.
Understanding the historical context provided can help in making sense of the real estate market dynamics. From 1981 to 2000, housing prices had a cumulative average annual growth rate of 5.1%. Then from 2003 to 2005, the growth rate in housing prices increased to more than 10% per year, which was not seen as sustainable by analysts. The surge in prices raised concerns about a potential housing bubble, similar to the one experienced in the U.S. in the early 2000s. The debate between analysts who relied on quantitative analysis versus those who believed in a new normal in the housing market reflects the complexity involved in predicting market trends.