(This is a re-publish of a post that was up briefly on Thursday before Blogger which hosts this site up and deleted it.)
Boy... you do someone a solid and this is the thanks you get.
Though the following might not meet the standard definition of "good" news, it may indeed be "necessary" news.
New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.
Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.
And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.
Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.
“There’s no way we can get to flat, from these depreciation levels, in the last nine months of the year,” says Zillow economist Stan Humphries. “Demand is a lot more anemic than we had previously thought.”
In our humble opinion, what we're seeing is housing prices following a trajectory that was temporarily forestalled by the Obama administration's attempts to prop up the market via Keynesian gimmickry. Instead of allowing the market to weed out the bad actors and to squeeze out the poisons in the system, programs like HAMP only delayed the inevitable and thusly delayed any true recovery as the market was never able to find the bottom.
As it is, the graph below suggests that housing prices are still above a historical trend line in the market.
Of course, the powers that be will not see the situation as such so expect another fresh round of programs to band-aid over and artificially prop-up a market that is trying to find the bottom.
As we have said many times before, the statist solution for previously-failed statist policies is simply more statism.