[Notary Sojac]

the problem of sinking house prices

Sinking house prices are a "problem" in the same way as one's body temperature "sinking" from 103.5 to 98.8 degrees is a "problem". It's a natural correction to an insanely overheated market.

[NVDave]

Correct.

The long-term trend of housing prices is that housing is priced at 2.6 to 3.0 times the median house income. Median household income is the 50% percentile of total income of all wage-earners in a house, eg, mom and dad put together in a two-wage-earner household.

In some areas of California, the median house price reached 9 times median household income.

That means that to regain the “long term trend line valuation,” the median prices need to a) assume no drop in median household income and b) drop 66%.

Most of California’s urban areas got up to 6 times median household income in their area. That means to reach long-term trend line prices, we need to see 50% price drops.

[SteamShovel]

It's a natural correction to an insanely overheated market.

Agreed.....

.....I only say the activity will artificially intensify the decline, injuring those who's homes were bought at prices that would have otherwise been OK.

I see this activity as the negative of the loans that got us into the overheated housing market in the first place.....

.....It may be legal and by contract, but it will cause a larger slump than would otherwise happen.

The result is the same in the negative direction.

[Finny]

Sinking house prices are a "problem" in the same way as one's body temperature "sinking" from 103.5 to 98.8 degrees is a "problem". It's a natural correction to an insanely overheated market.

Oh, maaa-aaa-aaan!! That's GORGEOUS! My husband is wondering why I was laughing and cheering in here!