January 16, 2008
Throughout last year, many economists had taken care not to overstate the severity of the housing slump, noting that employment has remained strong. Past housing downturns usually followed a sharp rise in joblessness.
This time, USC economist Gary Painter said, extremely cheap credit led to dramatic price leaps as unemployment has held at low levels, so "we didn't really have past history to judge what that could do to housing cycles. Now we know those prices were not sustainable."
Painter believes home prices won't recover before late 2009.