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A few weeks ago, we asked our readers for ideas and questions for future Planet Money newsletters and podcasts. We got a bunch of great submissions, including an intriguing one from Karl Baumgartner.

Baumgartner is a 29-year-old internal medicine resident in Denver, where home prices and rents have been falling. Depending on which data you look at, the Denver metro area is experiencing one of the steepest — if not the steepest — housing price declines in the nation. Home prices have fallen more than 2% year over year, according to the S&P Cotality Case-Shiller Home Price Index, and even more if you adjust for inflation. Rents have fallen even more dramatically.

"As a renter myself, I am ecstatic about the falling prices," Baumgartner writes. In fact, he just moved "to a bigger apartment with nicer amenities that I previously couldn't afford, but now can because rent has fallen." One of his friends, meanwhile, recently renegotiated her lease for about $500 less per month by showing her landlord that comparable apartments in her area were now going for much less.

"With almost all of my friends being in a similar position at the beginning of our careers with plenty of debt, we are all very excited about the decrease," Baumgartner says.

So, yeah, falling rents are obviously a win for Denver renters. But Baumgartner is wondering about the broader economic picture.

"We know that negative inflation is bad for the economy in general, and we try to shoot for 2% annual inflation in general. What about negative inflation in the housing market specifically? Are there any downsides to falling prices, or is this just a sign of the market working as it should, with supply finally catching up to demand?"

It's a great question because economics doesn't seem to provide a simple answer on whether falling housing prices are good or bad for the economy.

Obviously, falling home prices and rents have downsides for homeowners and landlords. But what about the broader economy?

Sometimes falling housing costs could be a sign that the economy is healthy and the free market is working as economists might hope. Higher prices encourage builders to construct more housing. More supply comes online. Supply comes closer to or may even surpass demand, and housing prices go down. It's the basic logic behind the YIMBY movement — a pro-housing development effort whose name stands for "Yes In My Backyard" — which argues that housing restrictions have prevented this healthy market process from delivering plentiful and more affordable housing.

Other times falling prices are a symptom of — and sometimes a big contributor to — a community's economic distress.

So how can we tell the difference?

When falling home prices are bad

Let's start with a clear bad scenario of falling home prices: Detroit. After years of deindustrialization and socioeconomic problems, Detroit saw a massive drop in population. Between 1990 and 2010 alone, Detroit lost nearly a third of its residents.

Home prices fell by more than 80% during the housing bust of the 2000s.

This wasn't affordability created by abundance. It was affordability created by economic collapse.

Detroit neighborhoods emptied out and fell into disrepair. At one point, in 2007, houses in Detroit were cheaper than cars. For over a decade, the city has had an official program to demolish abandoned homes and buildings. For many Detroit families, generational wealth evaporated.

TO GO WITH AFP STORY by Joe Szczesny, US-city-Detroit-auto-debt Curtains flap outside the broken window of an abandoned home

December 31, 2014 in Detroit, Michigan. After the largest municipal bankruptcy in US history, Detroit hopes outsiders will see the city's potential not the history of racial conflict, financial crises and citizen flight that has cut its population in half since 1960.