Reuters) - Home prices fell for the 53rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.
Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month.
It is a dubious milestone for the U.S.housing marketwhich has failed to gain much traction despite a host of government programs to reduce delinquencies and encourage demand with temporary tax credits and lower interest rates. Many economists expect further price drops, even if there are some anecdotal signs of growing demand, such as in pending home sales data.
"For the next six to nine months, the larger factors affecting the housing market that will produce more home price declines will be the excess inventory of homes, high negative equity and foreclosure rates, and weakened demand due to elevated employment, Stan Humphries, Zillow's chief economist, said in a blog post.
Declines are accelerating, and it will take a while before falling unemployment and other signs of economic improvement support the market, Zillow said.
Home prices fell at a 0.78 percent pace in November, the fastest since February 2009, the company said.
In October, Gary Shilling of A. Gary Shilling & Co., predicted that house prices would fall another 20%.
In the two months since, house priceshave resumed their decline. Below, Gary outlines why he thinks the recent drops are just the beginning.
Gary is offering a special discount on his research service for Business Insider readers. To learn more, please visit Gary'sweb siteor call 1-888-346-7444. Please mention Business Insider.
Housing: Great Expectations vs. Reality
Last spring, many believed that not only was the housing collapse over but that a robust rebound was underway. Investors were crowding into foreclosed house sales and bidding up prices in California, often the bellwether state for new trends. The tax credit of up to $8,000 for new homebuyers that expired in April spurred buyers and promised to kick-start housing activity nationwide. TheHomeAffordable Modification Program was trumpeted by the Administration to help 3 million to 4 million homeowners with underwater mortgages by paying lenders to reduce monthly payments to manageable size and then paying homeowners to continue to make those payments.
But then a funny—or not so funny—thing happened on the way to housing recovery...
Yes, with mortgage rates so low, houses look "cheap". And for a while this seemed to be helping...
Image: Gary Shilling
With low mortgage rates and collapsed house prices, the National Association of Realtors’ Housing Affordability Index had leaped to all-time highs.
Earlier this year, sales of existing homes skyrocketed (temporarily)
Image: Gary Shilling
The revival of home sales early this year proved to have less follow- through after the tax credit expired in April than did the previous expiration last November. Existing home sales subsequently fell to a new low, so the tax credits had only “borrowed” sales from future months with no lasting impact.
And housing starts finally bottomed
Image: Gary Shilling
And house prices seem to have bottomed, too. But...
Image: Gary Shilling
Don't forget about unemployment. Old measures of "affordability" no longer apply...
Image: Gary Shilling
It’s also become clear that the NAR’s Housing Affordability Index in the earlier post-World War II years is not relevant to today’s conditions. Back then, unemployment rates were usually much lower than now (Chart 7, page 4) and the current threats of layoffs, wage and benefit cuts and being forced into part-time jobs were almost nonexistent. Who ventures into homeownership if he doesn’t know the size of his next paycheck or even if he’ll have one?
Also, with almost a quarter of all homeowners with mortgages under water with their mortgage principals exceeding the value of their houses, many can’t sell their existing abodes even if they wanted to buy other houses.
Mortgage refinancings are up, and they're helping, but most homeowners can't refinance
Image: Gary Shilling
About 60% of all borrowers with 30-year fixed-rate mortgages could lower their interest costs by one percentage point at current rates. But only 38% could actually refinance due to tighter lending standards.
Nevertheless, lower mortgage rates have encouraged many whose mortgages aren’t under water to refinance them. Some are even paying down their mortgages to bring them above water so they can refinance at lowerinterest rates. Mortgage applications to refinance have jumped lately, but remain well below the levels of early 2009.
Closing fees in refinancings, however, are an important offset to the reduction in mortgage rates. Closing costs in July were 37% higher on average nationwide than last year’s $2,739.
And don't forget that we now have MUCH TIGHTER lending requirements -- so much so that Fannie and Freddie and FHA now have to underwrite almost all mortgages
Image: Gary Shilling
At the same time, the house price collapse and subprime mortgage meltdown has led to a drastic tightening in lending requirements. In contrast to the no-document loose-lending practices of yesteryear, just listen to what it takes today to qualify for a mortgage. You’ll need a job and at least two recent paystubs, two years of W-2 forms, proof of other assets you own and your tax returns.
Then there is the property appraisal, which has morphed from ultra-liberal to excruciatingly conservative. So the appraisal may be well below your purchase price, especially in markets with falling prices, so you’ll have to come up with more cash for the downpayment or convince the seller to cut his price.
Downpayments have also leaped from the zero or even negative levels of the housing salad days, and Federal Housing Administration-insured loans as low as 3.5% require up-front mortgage insurance payments of 2.25%. Your alternative is essentially a loan insured by Fannie Mae or Freddie Mac since the Government-Sponsored Enterprises account for almost all new mortgages today (see chart above).
Mortgages with downpayments under 20% require mortgage insurance and mortgage insurers insist on FICO credit scores of at least 680 out of 850 and charge $300 to $1,000 per year for every $100,000 borrowed. Estimates are thatalmost a third of Americans can't qualify for a mortgage because of low credit scores.
And now everyone knows that house prices CAN actually fall
Image: Gary Shilling
Most of all, the NAR’s Housing Affordability Index is largely irrelevant today because in contrast with the earlier post-World War II years, prospective buyers know that house prices can, and do, fall.
Who wants to buy an expensive asset with a big mortgage that may be worth much less shortly? And the financial leverage created by a mortgage magnifies the risk tremendously. Someone who buys a house with 5% down sees their equity wiped out if the price falls only 5%. So the fall in house prices and mortgage rates, which have driven up the NAR’s measure of affordability, have been offset by stronger forces.
So, too, will any future increases in the affordability index in all likelihood. The Fed may embark on further purchases of mortgage securities, which could reduce mortgage rates further, but the central bank will probably only act in response to additional economic weakness that will discourage homebuyers. The further declines in house prices we foresee will make them cheaper, but also convinces prospective owners that they are even worse investments.
The rebound in house prices is also suspect and may have peaked out (see chart above). Furthermore, both the previous decline and subsequent reversal probably overstate reality. Earlier, the many sales of foreclosed houses or by distressed homeowners tended to be lower-priced houses and, therefore, depressed average prices. The recent swoon in Los Angeles house prices compared with the early 1990s drop suggests this is true. Conversely, the recent rebound may be overstating reality since, as our good friend and great housing analyst Tom Lawler has noted, the homebuyer tax credit may have induced some to pay up to beat the deadline and to favor higher priced “traditional” house sales over “distressed” homes.
Tom also points out that the Case- Shiller price index for July, which showed increases in 13 of the 20 metro areas (not seasonally adjusted), was based on transactions from April to June and, therefore, included tax credit- related settlements in May and June. Also, seasonally-adjusted data reveals declines in 16 of 20 metro areas and a small 0.1% fall from June to July. Another Home Value Index compiled by Zillow reports that prices nationwide fell in July from June, the 49th consecutive monthly fall. That puts them down 24% from the May-June 2006 peak, similar to the 28% drop in the Case-Shiller index.
And then there's the still-massive number of foreclosures, which will keep pressure on prices
Image: Gary Shilling
The Administration’s HAMP initiative, introduced in April 2009, has been a huge disappointment...
But while mortgage modifications were attempted, lenders and servicers were basically forced by the government to suspend foreclosures. Now, as that program unwinds, foreclosures will again jump (Chart 12). Ironically, foreclosure rates have moderated recently because lenders tightened their standards in mid-2008 when housing and mortgages were in free fall. In 2009, two-thirds of all FHA- guaranteed new loans were to borrowers with credit scores over 660, up from 45% in 2008.
Nevertheless, lenders have been loosening in recent months. In January, Fannie initiated a program that allows first-time homebuyers to put down $1,000 or 1% of the purchase price, whichever is greater. In the first half of this year, credit card companies sent out 84.8 million offers to American subprime borrowers, up from 43.7 million a year earlier. In the second quarter of this year, 8% of new car oans were to borrowers with the lowest rank of credit scores, up from 6.2% in the fourth quarter of 2009.
The percent of mortgages past due is still climbing...
Image: Gary Shilling
Nevertheless, look for delinquencies (Chart 13) and foreclosures to spike in the slow economic growth, high unemployment quarters that probably lie ahead.
The number of bank-owned houses is still climbing (more future inventory)
Image: Gary Shilling
Already, Real Estate Owned by lenders due to foreclosures—perhaps the most hated term among bankers—is climbing (Chart 14). Estimatesare that a major share of the 7 million houses that have delinquent mortgages or are in some stage of foreclosure, as well as those yet to come, will be dumped on the market, adding to the already huge excessive inventory glut. Some 4.5 million loans are now in foreclosure or at least 90 days delinquent.
Mortgage delinquencies are linked to job losses... and the number of weekly unemployment claims is still too high
Image: Gary Shilling
Mortgages delinquent 30 days, many of which will probably end in foreclosure, have risen lately. They peaked in the first quarter of 2009 at 3.77%, then fell to 3.31% at the end of 2009, but have since risen to 3.51%, according to Tom Lawler.
He goes on to observe that 30-day delinquencies are linked to initial claims for unemployment insurance, which fell last year but subsequently leveled off and are now rising (Chart 15). Also, the delinquencies are rising as weak borrowers with modified loans again miss payments. Fitch Rating believes that 65% to 75% of mortgages modified under HAMP will redefault within 12 months.
"Distressed" sales are still high (prices slashed to move inventory)
Image: Gary Shilling
Indeed, bank-owned houses for sale jumped 12% in August from July when newly-initiated foreclosures jumped 25% to a six- year high.
Unlike most homeowners, banks tend to slash prices to unload REO quickly. As a result, average prices fell rapidly in 2008 when lenders sold foreclosed houses at low prices, as noted earlier. By January 2009, the share of distressed sales leaped to 45% of the national total (Chart 16). With the default moratorium on foreclosures due to HAMP, the distressed share has fallen on balance more recently, coinciding with the flattening in prices. But now with HAMP unwinding, foreclosures will probably leap, REO sales at low prices jump, and average prices resume their slide.
The homeownership rate (percent of households that are homeowners) continues to decline, probably headling back to its long-term average
Image: Gary Shilling
Back in the salad days of 10% annual price appreciation, a homeowner and/or investor who put down 5% enjoyed a wonderful 200%returnonhisinvestmentper year, neglecting taxes, interest and maintenance. But that hapless homeowner who bought at the peak lost all of his downpayment six times over as prices fell 30%.
No wonder that the homeowner rate, which spurted from its 64% norm to 69%, is now back to 66.9% in the second quarter and probably on its way back to 64% (Chart 18).
Meanwhile, household formation is lower than it was during the boom
Image: Gary Shilling
The converse of the ownership rate is the rental rate, which obviously fell from 36% to 31% and is now back up to 33.1%. We’ll explore the newfound zeal to rent vs. own later.
Meanwhile, we’ll consider another important component of the equation, household formation. Many believe that household formation and, therefore, demand for either owned or rented housing units is closely linked to population growth. A Beazer Homes official said recently that demographics would normally produce household growth of around 1.5 million a year.
But note that those trendless series are extremely volatile, ranging from a peak of almost 2.3 million at annual rates in the current cycle to less than 500,000 recently. Household formation is similarly volatile (Chart 19), not surprising since a household is defined as one or more people living in a separate dwelling unit and not in jail, college, an institution or an army barracks. So household formation is affected bythelustforhouseappreciation, income growth, employment prospects, family size, mortgage availability and all the other factors that determine the desirability of owning or renting.
Image: Gary Shilling
With the negative zeal for homeownership of late and weak incomes and high unemployment deterring renting, household formation has been weak.
No wonder that the vacancy rate for single- and multi-familyhousingunitsremains high (Chart 21). Of course,
As they lose their jobs and houses, many Americans are "doubling up"--moving in with friends and relatives. This further reduces demand for housing.
Image: Gary Shilling
Of course, homeowners thrown out of their abodes by foreclosures can continue to be separate households
by renting houses and apartments, but many of those and other discouraged folks are shrinking
households—and adding to vacant housing units—by doubling up with family and friends.
The Census Bureau reports that in the last two years, multi-family households jumped 11.6% ( Chart 22) while total households rose a mere 0.6%. Those aged 25-34 living with parents—many of them “boomerang kids” who have returned home—increased by 8.4% to 5.5 million. Not surprising, 43% of those were below the poverty line of $11,161 for an individual.
The number of houses for sale is still abnormally high... and house prices, like everything else, are a function of supply and demand
Image: Gary Shilling
As we’ve stated repeatedly in many, many past Insights, excess inventories are the mortal enemy ofhouse prices. And those excess inventories are huge.
Notice (Chart 23) that, over time, new and existing inventories listed for sale have averaged about 2.5 million. So, we reason, that’s the normal working inventory level and anything over and above 2.5 million is excess.
At the peak of 5 million reached in October 2007, that excess was 2.5 million. It subsequently fell but with the recent jump, the total is 4.0 million, implying excess inventories of 1.5 million.
That’s a lot considering the average annual build of 1.5 million houses. So the inventories over and above normal working levels equals one year's average demand. But wait! There’s more!
As noted earlier, as foreclosures pick up with the ending of the mortgage modification-related moratorium on lender takeovers, “shadow” inventory will become visible as many of those bereaved of their abodes join friends and family.
Furthermore, if we take the Total Housing Inventory numbers published by the Census Bureau at face value—and Tom Lawler, a very careful housing analyst concludes that it takes more than the faith of a mustard seed to do so—there are a lot ofhousing units that are likely to be listed for sale as owners give up trying to wait out the housing bust.
Recently, my wife told me of a friend who finally listed her house for sale right after Labor Day and got nary a nibble in the following three weeks. Then she was further discouraged when two other similar houses in her neighborhood were listed.
When you count "shadow inventory", the imbalance looks even worse
Image: Gary Shilling
Between the first quarter of 2006, the peak of house sales, and the second quarter of this year, the number ofhousing units, net of teardowns, conversions to non-housing uses and other removals, rose 5.7 million.
Of that total, 1.1 million were added to the pool of vacant units listed for rent or sale, 2.8 million were occupied by new households and so on down the list. Of the 1.3 million increase in those Held Offthe Market, the 1.1 million rise in the “Other” category is the one of interest. This component has leaped from the earlier norm of about 2.6 million to 3.7 million in the second quarter (Chart 25).
This rapid rise, coinciding with the collapse in housing, suggests strongly that many of these houses are indeed shadow inventory, units withheld in hopes ofhigher prices but highly likely to emerge from the woodwork sooner or later.
If we assume that half the 1.1 million increase since the housing peak in the first quarter o f2006 are shadow inventory, the total excess jumps from 1.5 million to 2 million at present, and is likely to rise further.
THE BOTTOM LINE: House prices probably have another 20% to fall
Image: Gary Shilling
This huge and growing surplus inventory of houses will probably depress prices considerably from here, perhaps another 20% over the next several years. That would bring the total decline from the first quarter 2006 peak to 42%.
This may sound like a lot, but it would return single-family house prices, corrected for general inflation and also for the tendency of houses to increase in size over time, back to the flat trend that has held since 1890 ( Chart 26).
We are strong believers in reversions to the mean, especially when it has held for over a century and through so many huge changes in the economy in those years—two world wars and the 1930s Depression, the leap in government regulation and involvement in the economy, the economic transformation from an agricultural base to manufacturing and then to services, the post- World War II population shift from cities to suburbs, the western and southern transfer of population and economic strength, the movement from renting to homeownership and the accompanying spreading of mortgage financing, etc.
Furthermore, our forecast of another 20% fall in house prices may be conservative. Prices may well end up back on their long- term trendline (Chart 26), but fall below in the meanwhile. Just as they way overshot the trend on the way up, they may do so on the way down, as is often the case in cycles. Furthermore, another big house price decline will spike delinquencies and foreclosures leading to more REO sales by lenders,whichwillfurtherdepress prices. Our analysis indicates that a further 20% drop in prices will push the number of homeowners who are under water from 23% to 40%, resulting in more strategic defaults, more REO, etc.
If house prices DO fall another 20%, a lot more homeowner equity will be wiped out
Image: Gary Shilling
At that point, the remaining home equity of those with mortgages would be wiped out on average (Chart 27. That, in turn, would impair already-depressed consumer confidence and their willingness and ability to spend, to say nothing of residential construction.
In California, epicenter ofthe housing boom-bust, construction jobs dropped 43% from June 2006 to June of this year, compared to a 28% decline nationwide, and the unemployment rate in the Golden State jumped to 12.3% in June, far above the 9.5% rate nationally.
No wonder REALTORS are so depressed
Image: Gary Shilling
It’s not surprising that the confidence of those involved in residential real estate is low and declining. The NAR Realtor Confidence Index is again plunging (Chart 30). A neutral reading for this index is 50, and it's now 24.1. In June, 42% of realtors expected prices in their areas to fall in the next 12 months compared with 33% in May.
Fannie and Freddie are ending up owning more and more foreclosed houses (at taxpayer expense). This is prolonging the problem...
Image: Gary Shilling
Fannie and Freddie are also allowing homeowners who face foreclosure and qualify for mortgage modification to stay in their houses for up to a year by renting them. The goals are to help those folks, keep the homes occupied to avoid deterioration, realize some positive cash flow and keep more houses off the market. The rents, at market rates, are often lower than their monthly mortgage payments. Still, these programs simply add to shadow house inventory, which will be revealed as those one-year leases mature and foreclosures are implemented.
Due to foreclosures, Fannie and Freddie owned 191,000 houses at the end of June, double the year- earlier total (Chart 33). And the inventory is growing as they take back houses faster than they sell them. Newly-initiatedforeclosures at Fannie and Freddie rose to 150,000inJuly,up60%fromApril, as borrowers failed to qualify for loan modifications. And they are encouraging the lenders of the mortgages they guarantee to seize foreclosed houses more rapidly to avoid them deteriorating or being trashed. Fannie took a $13 billion charge in the second quarter for cleaning pools, mowing lawns ad other carrying costs on the properties it owns.
Given all this, it's not surprising that few folks are planning to buy new houses...
Image: Gary Shilling
As noted earlier, traffic through new homes by prospective buyers is again falling, according to home builders (Chart 37).
And that new mortgage applications remain back at 1990s levels
Image: Gary Shilling
New mortgage applications for home purchases continue to drop (Chart 38).
And that the number of people planning to buy a house in the next six months continues to drop
Image: Gary Shilling
And those planning to buy a home within six months persist in declining (Chart 39).
Depressed yet? We are, too. But at least, as a Business Insider reader, you'll get a discount on Gary Shilling's research...
Image: A Gary Shilling & Co.
The previous essay was excerpted from the latest monthly research of Gary Shilling of A. Gary Shilling & Co.Gary is offering a special discount on his research service for Business Insider readers. To learn more, please check out Gary'sweb siteor call 1-888-346-7444. Please mention Business Insider.
NEW YORK (MarketWatch) -- Tom Forester is worried about another fall in the housing market -- and given his track record, it's worth listening to his concerns.
Forester predicted the most recent housing crash, positioning his Forester Value Fund(FVALX11.88,-0.09,-0.75%)to ride out the expected downturn. That approach worked, as the stock fund was up 0.4% in 2008.
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Despite lackluster recent performance, the Dogs of the Dow investment strategy still has fans. And this year's roster may be kinder to investors.
Now Forester is preparing for another crash, forecasting a 10%-20% fall in house prices this year and arranging his portfolio accordingly.
"We think there's big risk in 2010" for investors, said Forester. "Our finger is on the trigger to get more defensive, but the timing on this is hard."
Forester's earlier prediction meant his investors didn't lose money in 2008, when the Standard & Poor's 500 Index(SPX1,138,-12.19,-1.06%)was down about 37%.
Forester Value made 18% last year, lagging the index as it typically does in rising markets. But as a result of losing less than the average, the portfolio's returns are in the top 1% of its category for three years, top 3% for five years and top 8% for 10 years, with annualized returns of 5.7% over the decade, according to Morningstar Inc.
House of cards
Forester believes that the next housing decline will start in the second quarter of the year. He said several factors, including expiring government support programs and falling demand, will lead to the drop.
One of the causes will be the government's Home Affordable Modification Program, which allowed trial modifications of loans that would keep homes out of foreclosure. But, said Forester, very few of the modifications have been made permanent -- about 7% according to latest figures -- and that means there'll be many homes facing foreclosure this year.
Forester also pointed out that existing home sales fell 16% in November -- a worrying sign that may suggest programs like the First Time Homebuyer credit have run out of gas. December's existing sales numbers will be released on Jan. 25.
He highlighted another factor that could mean trouble in the housing the market -- the Federal Reserve's plan to end its programs of buying mortgage-backed securities and debt from Fannie Mae and Freddie Mac. The programs are set to end by April 1, and Forester thinks it could mean mortgage rates rise by roughly 0.75%-1%.
"And if rates are at 6%, it becomes harder to buy a home or refinance a mortgage," he said -- further depressing the housing market.
The real problem with this scenario, said Forester, is the impact it will have on banks.
"Banks are still valuing homes too highly on their balance sheets so they are vulnerable to a downturn in home prices again," he wrote in a quarterly update earlier this month, and this vulnerability could set off a similar downward spiral in the financial markets that was seen in late 2008.
"I think the TARP repayments were a bad idea," said Forester, because they could leave banks short of funds if a second housing crash does hit.
Forester said he's readying for a downturn by holding about 15% in cash and keeping defensive stocks in his portfolio. As of Dec. 31, some of the fund's largest holdings included 3M Co.(MMM85.06,+0.34,+0.40%), Microsoft Corp.(MSFT30.54,-0.05,-0.15%)and Chevron Corp.(CVX78.14,-0.01,-0.01%).
While Forester believes there will be a downturn in the next three to six months, he admitted his dire predictions may not happen, especially if the government takes further action, such as extending existing programs, or introducing new measures, to steady the housing market.
And though he was right about the 2008 crash, he was also a couple of years early. His fund took a defensive stance in 2006 and as a result underperformed the market by double-digit percentage points in 2006 and 2007, with returns of 3.4% and a loss of 5.2%, respectively.
Said Forester about the timing of his latest prediction: "Nothing matters until it matters."
Sam Mamudi is a reporter for MarketWatch, based in New York
To paraphrase Yogi Berra, the bubble's not over till the last drop splatters. That is certainly the case with the housing bubble. Home prices that seemed to be strengthening over the summer have again slipped, according to the S&P Case-Shiller index. Neither low interest rates nor a fat tax credit for homebuyershas changed this reality.
For the record, the city that took the biggest hit in 2009 was Las Vegas, where prices fell 27 percent. Denver took the smallest hit -- prices there slid a tiny tenth of one percent.
Some worry that home prices are headed for a double dip and want Washington to do something about it. We should worry that Washington takes their advice.
First off, falling prices are not all bad. They obviously make housing more affordable. The bubble sent prices so high that people who refused to borrow recklessly couldn't purchase a home. Every now and then, the prudent deserve a reward.
The crash in house prices has helped struggling industrial states in the Midwest and Northeast to retain some of their population. New York, New Jersey, Ohio and Michigan are among the states that probably would have lost more people to the Sunbelt had their residents been able to sell their homes at acceptable prices. (The industry's unromantic term for the phenomenon is "house arrest.")
This could have some political consequences: The 2010 census will be used to reapportion membership in the House of Representatives. It won't prevent the Northern states and Louisiana from losing seats -- or the Sunbelt and Washington state from gaining them. But it could slow the transfer of political power across regions.
The bubble's not over till it's over, and there's no way to slow its disintegration that doesn't involve innocent taxpayers. The federal government may have had a valid role in stabilizing prices in the middle of the near-financial collapse of over a year ago. But those days of panic are well past.
True, one in four mortgages is underwater -- it's higher than the value of the house. Further drops in house prices undoubtedly will send more mortgages into the drink. But stocks have staged a big recovery, job losses have slowed, and consumers are more confident that the economy will improve. The good news can counter the bad.
Tighter lending standards at Fannie Mae, Freddie Mac and the Federal Housing Administration will work against higher house prices, but what should we do about that? Insist that they continue backing the sort of risky mortgages that got us into this trouble?
If Washington wants to bring buyers into the market, the simplest thing would be to announce that the hefty tax credit for homebuyers will not be renewed when it expires next spring. Everyone should also be reminded that the Federal Reserve Bank has vowed to end its program to keep mortgage rates low by March 31. That interest rates have already started climbing should stand as a warning to laid-back house shoppers of what lies ahead.
A change in consumer mentality can somewhat cushion the economy from additional slips in house prices. Much of the public has stopped regarding a house as a no-fail investment and the equity in it as mad money to be blown on every whim. The home is again a place to live, so a rise or fall in its value is chiefly the concern of those who plan to move.
The federal government's job now is to put in force new financial regulations that will prevent future sorrow. While it can't stop a bubble that's bursting, it can stop one from forming.
