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.