Housing prices suck. In fact, they suck worse than they did last month. But the good news is that the rate at which the suckitude is increasing is slowing (this is the second derivative). From The Washington Post:
Home prices fell again in April, but at a slower rate, suggesting some parts of the housing market could be stabilizing, according to the Standard & Poor’s/Case-Shiller Home Price Index released today.
The closely watched home index found that, nationwide, prices declined 18.1 percent compared with April 2008. That was slower than the 18.7 percent decline seen in March.
“The pace of decline in residential real estate slowed in April,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement. “While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.”
If you squint really hard, you can see some glimmerings of light. Or maybe that’s just the aftereffect of squinting really hard.
Seriously, this kind of hope–which isn’t really hope at all, but wishful delusion–obscures what is required for a turn around in housing prices: a broad rise in incomes for the middle and lower-middle class.
There is, of course, the question of whether we should care if housing prices stay low. Perhaps, instead of dumping our earnings into housing (it’s the same damn house whether or not it’s worth thirty percent less), we should foster policies that invest earnings into rebuilding infrastructure (human and physical), greening our economy, and, once the recession ends, savings.
Just a thought.