The housing market, which already has been battered by the worst collapse since the Great Depression, could be setting itself for another bubble, well-known economist Robert Shiller told CNBC.
With home affordability at a 40-year high, there is "absolutely" a possibility that the housing market will face another bubble in the next five years, said Shiller, an economics professor at Yale, co-founder of MacroMarkets and co-developer of the monthly Case-Shiller home price index.
"The low interest rates, the affordability is leaning that way and the ratios are back down," Shiller said in a live interview. "I get glimmers of excitement among some people, but we still have a high inventory of unsold homes, and we still have a lot of weariness because of the recent experience."
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Another bubble? This one has not burst yet, it is only leaking. Housing on a national level is still WAY overpriced. The Fed is still propping up the fake bloated pricing via low interest rates to give Amerikans the impression they have equity and savings.
ReplyDeleteHome values will crashed back to mid 90s levels once the Fed jacks up the rates.
It's bizarre how things play out in such a totally predictable way.
ReplyDeleteI beleive it was around November of 2008 that Chapman was saying how the market would rally through summer of 2009 and then crash again for real.
And I'm thinking surely all these people can't be suckers that it should play out this way but sure enough here it is, a rebound rally through the summer and then the October melt fest...
Sad but true.
I don't like predictions, but I'd give 90% odds that it won't be a holly jolly Christmas, a special time of year. I don't underestimate the media's ability to prop up a dead horse though.
ReplyDeleteHe predicts pretty much flat for the next 5 years. But admits it is hard to predict.
ReplyDeleteWith the coming inflation, house prices will soar. Twenty percent inflation will raise house prices by a comperable value each year. Get in now at a fixed rate while the gettin' is good.
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