Consumer electronics prices fall all the time, and this is good. Why is it somehow bad that homes become cheaper? Bad for the speculators on the long end, sure, but everyone else? I think not.
Home prices have fallen to reflect economic reality. They're not arbitrary numbers, and shouldn't be manipulated as though they were.
Good for the people that sat on their cash instead of using it to further fuel the housing bubble.
Good for all speculators who make the right call. %^&* speculators who think that anybody but themselves should pay for their bets that go wrong. %^*& politicians and central bankers whose interventions fuel speculative bubbles. Too bad for regular consumers that buy into inflated markets. That's about all you can say, and anything else is just bad economics, IMHO.
Oh, and no, a bitcoin windfall is not why I'm here. I think most people who promote sound money do it because they really do care.
Not good for people or small families who bought a house and are now seeing their credit line go down and their collateral for the loan to shrink if home prices fall.
But eventually there will be those who benefit and those who are at a disadvantage because of a certain economic development.
But one thing you mentioned is so important:
"Home prices have fallen to reflect economic reality."
That's what all of this is, it is a correction of tendency that went too far, that was overheated. When people hear the term deflation and immediately tie it to a negative development, the question should be what happened before we entered a deflationary economic phase? When the price for a car goes from $20,000 to $60,000 within a matter of a few years and then pulls back to $50,000, theoretically we are in a deflationary environment (for that car of course). But the truth is that prices unreasonably exploded beforehand and this is what we saw happening over the last few years.
Same thing with rents. Many places are so ridiculously expensive that it feels like playing a weird computer game when running from apartment to apartment to just find out that hardly anyone with an average income could afford an apartment that was a third as expensive 15 years ago. I am curious to see in a few years from now where we are heading now, but the recent price levels have been insane.
