Good News

I think increasing sales volume and falling prices is about the best news we could expect from the housing market. Given how expensive homes had gotten, there was really no alternative but for us to see some steep declines. There’s no use, in that sense, of crying over spilled milk. Home prices are traditionally “sticky” but it would be very bad for the economy for home-sellers to refuse to bow to reality and lower prices. It’s worth trying to do mass mortgage re-writes to avoid a plague of foreclosures and vacant buildings that could wreck neighborhoods and cause prices to overshoot on the downside, but prices need to fall. Beyond that, I think the best we can hope for is high sales volumes that let us re-allocate our resources more efficiently.