The Revitalist

So, the housing market numbers are in, and no one is smiling. The consensus seems to be that the market is correcting—the days of sky rocketing value are over, and god help you if you got one of those interest-only mortgages (bad idea then, really bad idea now). But there seems to be a certain amount of chatter over whether the correction will be a soft or a crash landing. 

NY Times: New Signs of Cooling in Housing. "The trend here is one of stabilizing prices after the sharp gains seen for many years. While certainly a change in trend, so far the official data are not corroborating some of the more alarmist stories being bandied about recently." Joshua Shapiro, chief US economist with MFR, Inc. 

 Boston Globe: Market unease: Home prices fall 3.5%. "Home prices in Massachusetts fell 3.5 percent in July, the largest decline in 13 years, as the slowdown in the real estate market finally led sellers to cut their prices." BUT "During the real estate boom earlier this decade, prices increased 80 percent in Massachusetts. [my italics]"

 Paul Krugman: Housing Gets Ugly (Times Select article). Mr. Krugman waves his arms and cries "bubble!" and "pop!"

Wall Street Journal: The House the Fed Built (unfortunately only available online to subscribers). A WSJ editorial offers the 'what goes up, must come down' theory and lays the blame at the Fed's door. "The current slump in sales, new construction and prices is the aftermath of the astonishing and unsustainable housing boom that began in 2002." "How hard the housing fall will be is impossible to know, but a broader recession is far from inevitable."

The NY Times stokes the fire by reporting on the panic-stricken lengths that some sellers are going to in the most competitive markets to get their houses noticed.