The rapid decline in US housing prices since 2007 has made for some persistently depressing reading lately for those inclined to even want to read the news.
Bank failures, skyrocketing deficits, unrelenting federal intrusions into the private sector, job layoffs and a myopic congress are causing national serotonin levels to gyrate. With that in mind I would like to offer up what might be seen as some good news…..maybe.
Housing prices are not dropping as fast as they were before. Does that mean good times are just around the corner? No. But it may mean that the end of the precipitous decline in prices is near which is important because a market that appears to be disintegrating needs to at least see a bottom before it can stabilize. As Henry Blodget notes at Clusterstock:
This doesn’t sound like good news, but it is. Before house price declines can start decelerating, they have to stop accelerating, and it seems we’re finally there.
…..Nationally, house prices are now back to late-2003 levels, down 27%-28% from the peak. They appear to be headed to a total peak-to-trough decline of at least 40%.
Looking at the data I hope, to paraphrase the famous Reagan pony joke, that there is a pony in there somewhere.
A stabilzed housing market may be the only thing that blunts the multi billion dollar fubar that is the Obama mortgage relief plan.