Housing Prices Have Already Fallen More than During the Great Depression … How Much Lower Will They Go?
by George Washington
I noted in January that the housing slump is worse than during the Great Depression.
The Wall Street Journal noted Tuesday:
The folks at Capital Economics write in with this gloomy tidbit: “The further fall in house prices in the first quarter means that, on the Case-Shiller index, prices have now fallen by more than they did during the Great Depression.”
By their calculations, prices are now down 33% from their 2006 peak, compared with the 31% decline during the Depression.
The Independent agreed on Wednesday:
The ailing US housing market passed a grim milestone in the first quarter of this year, posting a further deterioration that means the fall in house prices is now greater than that suffered during the Great Depression.
The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average American home now costs 33 per cent less than it did at the peak of the housing bubble in 2007. The peak-to-trough fall in house prices in the 1930s Depression was 31 per cent – and prices took 19 years to recover after that downturn.
How Bad Could It Get?