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A blog about the economy and the Sacramento-area real estate market.

December 3, 2008
Let America's house prices fall

That's today's advice to the government from the Center for Economic and Policy Research in our nation's capital. It's released a seven-page study called "The Key to Stabilizing House Prices: Bring Them Down."

The point: Fannie Mae and Freddie Mac should restrict lending activity in bubble markets to bring prices down and just get this over with sooner than later. The thinking is that restricted credit would push prices down 20-30 percent in overvalued markets.

 Too bad this study doesn't have specific recomendations about specific markets. Prices have already fallen 30 percent in much of the Sacramento region. Does that mean we would be excluded from this? Are we already there?

Whatever, this is an interesting take. If we just got it over with, people would feel better about buying and that would put a floor under a market that is otherwise likely to "overcorrect."

 

 

 

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