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Today’s economic green shoot is the latest Case-Shiller report, which shows that although house prices are still declining, they’re declining at a slower rate than before.  Hooray!

But Henry Blodget is right about this:

We’re still talking about an astonishing rate of collapse….So the folks who use this slight moderation in the rate of decline to spin tales of a “bottom” or, worse, a “recovery” are smoking something.  Prices have at least another 10%-15% to fall, and they’ll likely be falling for at least another year or two.

To show this graphically, I’ve helpfully extended the S&P chart Blodget includes in his post.  It’s this simple: as long as the line is below zero, house prices are dropping.  And if price declines slow down at about the same rate they accelerated, it means we won’t get back to zero until sometime in 2011.  Put even more simply: the price decline between 2007-2009 — which started slowly and then picked up steam — will probably be mirrored by the price decline between 2009-2011 — which started with a head of steam and will end up dropping ever more slowly until it finally flattens out.  And that price drop was about 25%.

So if anything, Blodget might be too optimistic.  We might still have 25% to go.

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