"Why Home Prices May Keep Falling ," By Robert J. Shiller, The New York Times, June 8, 2009

"Home prices in the United States have been falling for nearly three years, and the decline may well continue for some time.

Even the federal government has projected price decreases through 2010. As a baseline, the stress tests recently performed on big banks included a total fall in housing prices of 41 percent from 2006 through 2010. Their 'more adverse' forecast projected a drop of 48 percent — suggesting that important housing ratios, like price to rent, and price to construction cost — would fall to their lowest levels in 20 years.

Such long, steady housing price declines seem to defy both common sense and the traditional laws of economics, which assume that people act rationally and that markets are efficient. Why would a sensible person watch the value of his home fall for years, only to sell for a big loss? Why not sell early in the cycle? If people acted as the efficient-market theory says they should, prices would come down right away, not gradually over years, and these cycles would be much shorter."

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"Job Losses Push Safer Mortgages to Foreclosure ," by Peter S. Goodman and Jack Healy, The New York Times, May 24, 2009

"As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.

In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories.

With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy."

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Peak Oil Financial Crisis: "US home price drops set records in January," By Alan Zibel, Associated Press, March 31, 2009

"WASHINGTON – Home prices sank by the sharpest annual rate on record in January, and the pace continues to accelerate, but there were a handful of battered metro areas where price declines slowed, according to data released Tuesday."

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