Housing Collapse? Not According to the Data

The authors Charles W. Calomiris, Stanley D. Longhofer and William Miles argue that housing fears have been over exaggerated. They also think that devastating losses by financial institutions have been overblown.
Excerpt:
We conclude that declines in house prices are highly likely to remain small. Our analysis reveals, unsurprisingly, that foreclosures and home prices have negative effects on each other over time, but this does not imply a vicious cycle of collapsing prices. Our models predict that as foreclosures continue to climb in many states, house prices will remain flat or decline in those states -- but will not collapse.

Turmoil in the housing market has led to fears that home prices will drop precipitously, particularly if foreclosures force large numbers of homes onto the market in the coming year. Recently, these fears have driven financial stocks down and led to the government rescue of Fannie Mae and Freddie Mac. But the projected losses have been wildly exaggerated. Most Americans have not experienced any significant decline in the value of their homes -- nor are they likely to.
Read this article over at Washington Post:

Can't believe we still have such articles coming out in 2008...