The CalculatedRisk stats say that houses aren't moving at current prices. That says nothing about what they'd do at lower prices. Even if all that happens is

The CalculatedRisk stats say that houses aren't moving at current prices. That says nothing about what they'd do at lower prices. Even if all that happens is "move up", things are better for the folks who got to move up. (And there's less net economic loss if we lose the inexpensive places than the more expensive ones.) More likely, you'll get smaller and more households, as the run-up to the burst had people living together for economic reasons. Since I said that Detroit wasn't an exhaustive list, it's curious that another member of the list would be considered disproof. Note that Ohio's proposal, forcing banks to offer for sale, does what I suggested - it puts things on the market. Note that banks walk away because they let the real liabilities grow while they kept thinking that their book value mattered. Wipe out the liabilities and stop them from growing, as the Ohio proposal does, and there's something there. More to the point, there's more there the sooner that happens. I'm sure that there are some places that won't get a bid even at 0 reserve and no liabilities. However, I see no reason to treat everything that way because most will get a bid. (I know folks who wanted to buy blocks of Detroit for the right price, but weren't willing to take the liabilities.)