Tuesday, May 27, 2008
Housing Market Blues and Wha-Hoos!
Business Week and CNN each report on the decline in the Case-Shiller index by 14%. Let's be clear on one thing, which is that in most cases houses haven't disappeared. When Hurricane Katrina ripped through Louisiana and Mississippi, houses disappeared and society was poorer because something it produced disappeared. Here the price is falling, which is bad for home sellers but is equally good (by and large) for new home buyers. Considering that the news was riddled over the past few years with stories on how "outrageously expensive" housing was, I can see no way for the housing market to experience anything but "bad news." Price can only be either too high or too low, according to the media.