Monday, December 27, 2010

The Fallacy of a Pain-Free Path to a Healthy Housing Market - Economic Letter, December 2010 - FRB Dallas

The Fallacy of a Pain-Free Path to a Healthy Housing Market - Economic Letter, December 2010 - FRB Dallas: "The Fallacy of a Pain-Free Path to a Healthy Housing Market"

"As gauged by an aggregate of housing indexes dating to 1890, real home prices rose 85 percent to their highest level in August 2006. They have since declined 33 percent, falling short of most predictions for a cumulative correction of at least 40 percent.[1] In fact, home prices still must fall 23 percent if they are to revert to their long-term mean."

1 comment:

Communisty Associations Institute said...

> home prices still must fall 23 percent

With the proven track record of HOA's ability to preserve property values, that is impossible. As long as volunteer board members have the power needed to do their jobs, housing prices will not drop.

The only way home prices can decline is if the government decides to interfere with the free market choices of homeowners and subject HOAs to regulation.