There is a hope out there that the housing crisis is passing and that prices have bottomed out. I doubt it. According to Zillow our house is worth $73,000 less than when we purchased it three years ago. I brought this up at work last week and another guy said that his house is worth $200K less.
This means that there will be years more of people walking away from their homes, defaulting, or stuck in places they need to leave. And if values were to somehow rebound to where they were, it would mean that the bubble had been re-inflated and we would be back in inflationary la-la land.
It’s a mess and I don’t see a good solution. I think there will be more bankruptcy, more pain, and a general reset of the playing field. We need a year of Jubilee.