Falling prices are bad in the current arrangement, unfortunately, for more reasons than the current owners being upset: a bunch of other financial products are also tied to them, so falling house prices cause a mess cascading beyond just the real-estate market. E.g. the 2008 crash produced defaults on housing derivatives worth more than the entirety of the actual real-estate in question, which in turn produced bank failures, etc. (Not a good situation in the first place, but it's why financial news treats falling housing prices as negative news.)
> a bunch of other financial products are also tied to them, so falling house prices cause a mess cascading beyond just the real-estate market
That's an argument for gradually deflating housing prices, assuming they are overpriced. If people are running businesses and preparing for retirement with faulty price projections in mind, I don't see why others (people who don't own homes, mind you) should be forever penalized because the system is already stacked against them.
I agree they should be deflated, if overpriced. My point was that the people who don't own homes also suffer from real-estate declines in many cases, with the current way the financial system is intertwined with real estate (which is itself a problem). By dollar terms the vast majority of money lost in the '08 real-estate crash was lost by people who didn't actually own a house or condo, because the second-order losses were much larger than the primary losses.
