Robert Shiller of Yale, one of the few economists with a good long-term track record calling house prices, sat down with the Wall Street Journal to discuss the latest house price data. Although we’ve been seeing a few signs of stability in recent data Shiller is not terribly optimistic about the long-term outlook. The key points from his comments:
- The trend looks steady down.
- Prices are back to their 2002 levels.
- Bubbles tend to overshoot on the downside.
- He doesn’t think home prices are likely to climb any time soon.
- Without a change in consumer sentiment home prices will remain in a funk.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.