Realtors will try and spin this as "a good time to buy." Their poor reasoning will be ignored. Shiller, the man who has now called the top of the .com bubble AND the housing bubble nearly perfectly, in all his wisdom, knows that we've only just begun. Home Prices Plunge At Record Rate In 2007: S&P By REUTERS Published: February 26, 2008 Filed at 11:00 a.m. ET NEW YORK (Reuters) - The collapse in home prices accelerated to a record pace in the fourth quarter of 2007, with prices plunging 8.9 percent last year, according to a national home price index released on Tuesday. The quarterly drop in prices of existing single-family homes quickened to 5.4 percent in the final three months of last year from a 1.8 percent drop in the third quarter, according to the S&P/Case-Shiller U.S. National Home Price Index, Standard & Poor's said in a statement. The 8.9 percent year-over-year decline was the largest in the 20-year history of the index, as housing was pressured lower by a huge supply of homes for sale, rising foreclosures and tighter lending conditions. By comparison, during the 1990-91 housing recession the annual rate bottomed at a 2.8 percent drop. The composite index of 10 of the largest metropolitan areas fell 2.3 percent in December versus November and tumbled 9.8 percent year-over-year, which set a new record. The composite index for 20 metropolitan areas fell 2.1 percent in December from November and sank 9.1 percent year-over-year. "We reached a somber year-end for the housing market in 2007," Robert Shiller, professor at Yale University and chief economist at MacroMarkets LLC, said in the statement. Shiller, co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, said home prices across the nation and in most metro areas are significantly lower than where they were a year ago. "Wherever you look things look bleak, with 17 of the 20 metro areas reporting annual declines and the remaining three reporting flat or moderate growth rates," he said. Furthermore, 14 of the metro areas reported record low growth rates and eight showed a double-digit decline. "The monthly data paint a similar picture, with all metro areas now reporting at least four consecutive negative monthly returns," Shiller said. Miami, remained the weakest market, reporting a double-digit annual decline of 17.5 percent, followed by Las Vegas and Phoenix at a 15.3 percent drop each. The three cities boasted of some of fastest rising home prices in 2006. San Francisco, another once-frothy market, in December slipped into negative double-digit territory with an annual decline of 10.8 percent. Charlotte, North Carolina, Portland, Oregon and Seattle were the only three metropolitan in the indexes where prices rose in 2007. Seattle, however, came in at only 0.5 percent, an almost flat growth rate.
By the way - some publicly traded homebuilders have wise leadership: Wednesday, February 20, 2008 Report: Pulte Homes building stash of cash Bloomberg Wire Services Pulte Homes Inc. is weathering the third year of the U.S. housing decline by building its cash reserves, Chief Executive Officer Richard Dugas told Bloomberg News today. "It's a cyclical business and we're certainly feeling the pain," Dugas said in an interview with Bloomberg Television. "The most important thing is to preserve the cash we have not knowing, frankly, if it could get worse from here." New U.S. home sales have plummeted to an annualized pace of just over 600,000 in December from 1.39 million in July 2005. Shares of Bloomfield Hills-based Pulte have dropped 56 percent in the year through yesterday.
He's a perma bear. He's been bearish on stocks calling them a bubble since 1996/1997. He never became bullish over the last 12 years. Not sure what wisdom there is in being a broken clock prognosticator.
Do you even know who Robert Shiller is? Seriously? He's made TWO negative calls, that proved to precisely correct, that I know of. How does he qualify as a permabear? wtf is a permabear to you? Anyone besides Larry Kudlow?
He also bought a home on Long Island in I believe in 2005 though he had been calling the top for a few years. I think he mentioned the utility of owning rather than waiting for the so called crash to play out. He is reasonable but as the previous poster says he is a permabear who appears to base his work on historical trends. With that I doubt he or anyone of the like would've owned any stock during the 90's as p/e's expanded. Outside the 4 cancer states, RE is not that bad.
Shiller is one. He is perpetually negative on equities as an investable asset class. Nothing will change his opinion. He is dogmatic and inflexible. Two attributes that are very unhelpful as an investor.
I've never known Shiller to be a permabear, ever. The only two markets he ever tried calling on top on were stocks in 1999, and housing in 2005/2006.
ByLo he's been bearish on equities calling them "overvalued and ripe for a correction" since 1996: http://works.bepress.com/brad_delong/2/.Then in 2001-2002 he called a secular bear market: http://www.marketwatch.com/news/sto...x?guid={E6B70C6A-C1DA-4317-92A3-910D9D635766} Even if he will be proven right, only a dogmatic preacher would publicly make predictions like that, i.e. a perma bear. An unbiased, flexible investor would react to incoming data as it becomes available.