Let House Prices Plummet

The corporate media shows its bias, as do most economists and politicians, by arguing that the current housing price decline is bad.

It's bad for people who own homes, and especially bad for people whose houses are being foreclosed, but it's good news for the MANY people who rent or who expect to buy a home in the future.

Frankly, houses are overpriced in the US compared to historical trends and the state of the economy - it was speculative and there isn't anything the government could do to stop them from declining. I'm from Vancouver, Canada - where the average single family house is now $1 million - that's crazy! Even my local West Philly neighborhood has houses for $300,000-$500,000 which is a lot. So as long as the bubble can be burst without causing a recession (and so long as the government does something to address foreclosures and the overall lack of affordable housing for people who are renting), it should be ok.

The home ownership rate in the US is around 68%. However it is only 49% for Blacks and Hispanics. It's probably far lower for low-income people (note: I couldn't find statistics for this online).

Look at this map of the home ownership rate in Philadelphia (from 2000, but likely hasn't changed too much) and note the contrast with the suburbs:
Map

For those of us who rent, lower housing prices will mean lower rents in the longterm (aka "less extravagant" rents). I suspect rent lags housing prices. Eg rent follows housing prices averaged over a longer time period. So while I don't expect my rent to actually decrease - it rent will probably continue to go up 5-6% per year (eg twice the rate of inflation!), even if my local housing prices fall another 10-20%. The advantage of this housing price decline is that it means that they won't be going up at 10%/year.

High housing prices (along with the rising cost of healthcare) play an essential role in keeping people in poverty. While you can organize workers to get higher wages to aim for a living wage, we also need a systematic strategy to address the lack of accessibility to quality affordible housing (I think city governments forcing developers to have mixed income housing is one good solution). It's important to care for people who are losing their homes, but it's even more important to care about the poorer people who didn't have a chance to buy a home in the first place, not to mention those who are homeless!

By "plummet", I think housing prices should fall 20-50% from their peak -- obviously varying by region. They're currently down 20%.