Actually, I think the bailout is going to accelerate a decline in home prices.
My thinking is that the point of all this is to ‘unstick’ the credit markets and get banks lending again. Remember its sales that set the comps and push the prices down. Given tightening lending requirements and the fact that the ‘bloom is off the rose’ regarding RE as an investment, I can’t see anywhere to go but down.
The scary thing is that the bailout is probably going to force bigger future bailouts, as tumbling house prices will cause more folks to toss the keys.
