I know from the comments of Kossacks to my previous diaries that the vast majority do not want a government stimulus plan targeted directly at the housing market. Many people think house prices are still too high and that no stimulus should provide any benefit to the "wealthy" who could buy houses with tax incentives.
But today's news is shocking even in the context of the worst recession since the Great Depression.
Dec. 23 (Bloomberg) -- Sales of previously owned homes in the U.S. fell more than forecast in November and prices dropped by the most on record, indicating the real estate slump will extend into a fourth year and worsen the recession.
Purchases declined 8.6 percent to an annual rate of 4.49 million, from a 4.91 million rate in October that was less than previously estimated, the National Association of Realtors said today in Washington. The median price dropped 13.2 percent from a year earlier, the biggest decline since records started in 1968. Separately, the Commerce Department reported today that new-home sales fell 2.9 percent last month.
Prices will plunge further as job losses sap demand and foreclosures add to the property glut.
So let's see, 1) HOUSE PRICES WILL PLUNGE FURTHER;
2) FORECLOSURES WILL INCREASE EXPONENTIALLY; AND
3) THE HOUSING GLUT WILL WORSEN, THUS
4) PROLONGING THE RECESSION.
Meanwhile, the only "stimulus" package on the table is aid to states to build roads/infrastructure and offset Medicaid expenses.
Not one nickel to clear the glut of unsold houses on the market. Just ignore the clear advice that John Maynard Keynes provided 70 years ago.
I guess the answer is we haven't had enough. Give us more pain.