Legal Commentary

Housing Prices Still Plummeting

By Big Tent Democrat

Via Atrios, the Geithner Plan to pretend "legacy assets" are not actually, um, toxic, will have to be a long term one:

Home prices in 20 U.S. cities fell 19 percent in January from a year earlier, the fastest drop on record, as demand plummeted and foreclosures rose. . . . A glut of unsold properties may keep prices low, shrinking household wealth and damping spending. Still, sales of new and previously owned homes rose in February, indicating the housing slump, now in its fourth year, may ease as policy efforts to unclog credit and aid borrowers begin to take hold.

“There is still a lot of downward momentum,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York. “We don’t think we’ll see a bottom in home prices until the second half of next year. The decline in home prices will continue to depress household balance sheets.”

It will also depress the value of those "legacy assets" Geithner is so sure are underpriced.

Speaking for me only

Full post as published by TalkLeft on March 31, 2009 (boomark / email).