Bob Shiller: 'Decline May Well Continue for Some Time'
Yale econ professor Robert Shiller had an op-ed in the Times this weekend that talked about why there’s not necessarily an end in sight for the decline in the country’s housing market. The piece examines why other declines have dragged out for years: “Despite the uptick last week in pending home sales and recent improvement…
Yale econ professor Robert Shiller had an op-ed in the Times this weekend that talked about why there’s not necessarily an end in sight for the decline in the country’s housing market. The piece examines why other declines have dragged out for years: “Despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline…Several factors can explain the snail-like behavior of the real estate market. An important one is that sales of existing homes are mainly by people who are planning to buy other homes. So even if sellers think that home prices are in decline, most have no reason to hurry because they are not really leaving the market. Furthermore, few homeowners consider exiting the housing market for purely speculative reasons. First, many owners don’t have a speculator’s sense of urgency. And they don’t like shifting from being owners to renters, a process entailing lifestyle changes that can take years to effect.” He concludes: “Even if there is a quick end to the recession, the housing market’s poor performance may linger. After the last home price boom, which ended about the time of the 1990-91 recession, home prices did not start moving upward, even incrementally, until 1997.”
Why Home Prices May Keep Falling [NY Times]
I hope you don’t live out your later years in a studio rental, bodega. That would be sad. Your SS check won’t even go that far by then. Fool.
Its time you either added something to a conversation or got the hell out of here.
Here’s some composite data on Brooklyn from trulia:
http://www.trulia.com/real_estate/Brooklyn-New_York/market-trends/
Jan 2000 median price was $165k and prices peaked at $620k.
dibs,
I claimed when all said and done, Speculative Ghetto brooklyn will fall 50-70%. Yes your place falls in this category 😉 Ever notice how Dibs in his delusional world groups his place with PRIME BK?
DIBS, a 50-70% drop would force you to change your ID to Daveinboerumhill
sam…the data may be available on the Prudential Douglas Elliman site where Mr. B posts the quarterly numbers.
I’m sure its over 100% in that timeframe.
I’ll try and check that site.
dibs, how much have prices climbed in Brownstone Brooklyn since 2000? are such statistics available? It has to be over 100%.
I never said prices wouldn’t fall, jackass. Brownstone Brooklyn will not fall 50-70% from the peak.
You need to start thinking about Plan B.
I sort of agree that there is no reason in the world why prices should be higher today than say in the late 90’s.
Is the economy better now? are there more big year-end bonuses? Is unemployement lower? No. No. And no. The bubble has popped and the underlying reality is that most people do not have a lot more moeny on hand than they did ten years ago.
Prices need to adjust down so things can start to sell again and we start seeing some real turnover. The tendency not to face reality is so typical of the NYC real estate scene. It is all based on hyperbole and snobbishness and fantasy in good times and now, when things have soured, the realtors nd their clients cannot let go of their delusions.
shiller is one of the most legit people commenting on this. he’s a Yale economist, and is the same guy behind the case-shiller home price index — so he’s been looking into this for a long time. He was one of the first to call the dot-com bubble, and not just with some blog, with an entire book, “irrational exhuberance”, which he then updated to correctly call the real estate bubble in 2004. fascinating book.