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ROBERT SHILLER: THERE’S MORE DOWNSIDE IN HOUSING PRICES

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.
See the full interview here:

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