Interesting commentary here from Robert Shiller who appeared on CNBC this morning following the release of his home price index. The index showed a 12% year over year increase. Although Professor Shiller said the housing market was recovering, he also said that none of it appears real. He added that the market appears very speculative at present. He said:
“Housing goes through big cycles. Take California for example. It’s been up and down, up and down for a decade and it doesn’t go anywhere. It’s just a rollercoaster. That’s the way these markets have become. So, for a long-term buyer, the fact that they’re going up now doesn’t mean a whole lot.”
I can confirm this. I keep a pretty close eye on real estate here in San Diego which was the epicenter of the bubble and the market here is crazy speculative. I am seeing tons of listings above their bubble highs and lots of flippers coming back into the market. Things are feeling very frothy. I definitely wouldn’t say it’s a bubble, but the current trend is unsustainable. At least here in Southern California….
See the full interview here: