Housing Needs a Smackbottom?

Yes- That statement made by the very randy secret agent that everyone adores. The housing market, Like the sinister bad girls portrayed in the Austin Powers film may need a “Smackbottom” in order to get to a point where the prices can start to recover.Currently the Housing market has seen a 26-28% plunge since 2006. This drop is not over as supply due to foreclosures continues to pressure the market and not allow for a stability point in valuation. Essentially we need a price drop so severe that we reach clearing price. (ultimately it’s that price where the goods or services are pushed off the shelf.) The housing market needs this economic enema. This clearing price will send the price pendulum swinging in the opposite direction. It begs the question of stimulus and its effect? Should we just allow failure to occur in order to get to the inevitable truth? A 40% price correction or “smack bottom” could be just what the.. uh Dr. Or super spy ordered.

Enjoy.

http://www.bloomberg.com/news/2010-09-15/u-s-home-prices-face-three-year-drop-as-inventory-surge-looms.html