Housing Values and the "D" Word

Like I said from the beginning, Depression (houses too)-

In the past few years, we’ve all been careful to choose our words carefully, not calling it a recession until it fit the technical definition and avoiding any inappropriate use of the “D” word — Depression.

Things were bad but the broader economy never reached Depression territory. The housing market, on the other hand, just crossed that threshold.

Home values have fallen 26 percent since their peak in June 2006, worse than the 25.9-percent decline seen during the Depression years between 1928 and 1933, Zillow reported.

November marked the 53rd consecutive month (4 ½ years) that home values have fallen.

What’s worse, it’s not over yet: Home values are expected to continue to slide as inventories pile up, and likely won't recover until the job market improves.

The Real Effect
I love how CNBC is trying to say that house prices won't recover until the job market improves. While able to be correlated, what is needed is price discovery. We need to know where the bottom is and the more that we try to prop up prices, the more we encourage speculation in one market or another.

The Feds cannot sustain an artificially high housing price forever, at some point, they will fall. And fall hard. This will not be good for everyone, but it will be bad for those who primarily encouraged this artificiality. In other words, it will be bad for the people that caused the problem in the first place.

This will end bad lending practices, crazy leveraging, and encourage a return to a stable economy.