Bad Paper

David Leonhardt writes an article in the NY Times about the illogic of some homeowners who refuse to accept reality when selling their house. Despite ample evidence everywhere that most real estate isn’t worth as much as it was during the peak, some people refuse to budge on the price.

This is even the case in my neck of the woods with some houses on the market for nearly a year. The reason is clear. The owner believes that home values alway appreciate and they now refuse to accept the harsh reality that this isn’t true.