Sticky Home Prices Finally Start to Get Less Sticky
Houses are almost perfectly engineered to trick owners into overvaluing them. For both economic and psychological reasons, there is no asset more conducive to hopeful overvaluation. That means real estate slumps tend to grind on for years, until sellers submit to reality and reduce their prices.
This week’s batch of economic reports suggest that the adjustment is finally starting to happen. The decline in house prices is accelerating, especially in some of the big metropolitan areas covered by the Case-Shiller index released Tuesday, while the number of home sales has recently risen a bit.
From "Be It Ever So Illogical: Homeowners Who Won’t Cut the Price" in the NY Times