Yale's Schiller Tells Barron's He Sees 20%-30% Price Declines -Including NYC and SF

Discussion in 'Economics' started by ByLoSellHi, Mar 25, 2007.

  1. Yale's Shiller Calls for Further 20-30% Housing Price Declines

    Posted on Mar 25th, 2007


    Yale economist Bob Shiller says in the weekend issue of Barron's that he's still looking for 20-30% housing price declines over the next 5-10 years -- including in untouchable cities like San Francisco and New York (and I'll include Vancouver):

    ... THE FUNDAMENTAL FACTOR TRIGGERING the price slump ahead is the fact that home prices have risen to levels far above construction costs, says Shiller. Such an anomaly can't persist for long, even in what he calls superstar cities like New York and San Francisco that boast a paucity of available land and severe zoning restrictions.

    Throughout U.S. history, populations generally have moved to areas with lower housing costs when prices become elevated in hot areas. Then home prices reverted to construction-cost levels, even in the once-expensive markets. This, Shiller thinks, is likely to recur.

    He gave a speech recently to an executive group at Bank of America headquarters in Charlotte, N.C. Many in attendance were expats from San Francisco, the bank's old hometown, and they told him they had adjusted to Charlotte just fine after being uprooted from every American's dream city. Clearly, migration remains the big leveler in real-estate markets.
  2. mr shiller was recently part of a R.E. roundtable discussion
    held to a sellout audience in NYC

    he was the most negative person in the panel ...

    he acknowledged there were differences between New York City and the rest of the country.

    -New York will stay ahead -It'll fall less.- ( said mr shiller )

    ( this small excerpt taken from a summary of the session
    in the "realdeal" magazine )
  3. Shiller has a vested interest in Housing meltdown, who is going to be buying his books and expertise if it doesnt materialize?

    He put in way too much effort into calling for a meltdown, to stop preaching now..
  4. Shiller is very good. He is one of the few economists who really understand economics.
  5. blast19


    Are you still pretending to be a beacon of knowledge? Give it up...you fade into the darkness when challenged. I'm still waiting for those statistics about Miami, not just the blather. Thanks. :D
  6. His book Irrational Exuberance published in early 2000, right before the market crash. Most people laughed at him at that time. You'd better respect the view of a person with such records.

    No one can talk down the market anyway, market rises and falls by itself :D
  7. Seriously now; I agree that some people promote hyperbole, good and bad, to sell books or seminars.

    Do you not recognize, without condition, that Shiller is way above that subset of individuals?

    And he is not trying to sell books by the way. He does have a housing market futures product, that is traded actively, and used as a market sentiment indicator on housing, much as treasuries are as an barometer of future sentiment on interest rates.

    I'm not saying he will be right or wrong. No one can know that.

    I'm merely saying he is far more credible than most, both in his academic credentials and in the way he conducts himself.
  8. the new CME "housing futures market" is not anywhere close to being traded actively nor has it gotten much "open interest"

    as far as it being a "sentiment indicator" ... I am not sure
    about that either

  9. Shiller is a fool with Yale credentials. Thers plenty of them, I should know!

  10. Chagi


    I'm curious - have you read the second edition of Irrational Exuberance? The new edition contains some additional material, specifically covering the US housing market. I personally found it to be an excellent read, and I am somewhat suprised that there would be some individuals on the forum with a negative opinion of him.
    #10     Mar 25, 2007