From Bloomberg: ‘Millionaire Homes’ May Lose Value Until 2012 (ht James)

… “Tighter lending standards and the lack of cheap financing for these borrowers continue to be key issues,” the New York- based [JPMorgan Chase & Co. analysts] wrote [in a June 12 report], referring to “jumbo” mortgages. That’s after so-called interest-only and option adjustable-rate loans were a “major driver” of soaring values, they said.
…
“Currently, we have national home prices bottoming in 2011,” they said. “However, prices for more expensive homes may not bottom out until 2012, and ultimately result in peak-to- trough declines in excess of 60 percent (compared to 40 percent nationally).”

“California is probably worse than other states, but higher-priced homes in general are going to be a problem,” Sim said in a telephone interview today.

Hmmm…This article was referenced on the Calculated Risk blog today.  (by the way, Calculated Risk is one of othe finest blogs of its kind)

Again, it references trends I think I have been discussing for the last couple of days.  I hate to be a stick in the mud, but do you think the market has anticipated a turn-around in the economy prematurely?

If so, I would expect another thud down the road here.  On the other hand, maybe the optimism is for real.  I just don’t see it.  With the current unemployment picture, where will the spending for this recovery originate?  I would think any recovery would need some encouraging jobless numbers to be authentic.  There has been some talk of a “jobless” recovery, but they don’t have the formula for an economic system prospering without healthy employment in any of the economics texts I have read.