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 think Paul Krugman is certifiably insane. He even looks insane.
His schtick is entirely political. That’s why he got the Nobel. He fundamentally dislies the United States and its institutions. He much prefers the way the French or the Swedes do business. He used to like the Japanese back when everyone thought they had all the answers.
He does save me a lot of time in the mornings though because his columns are so repetitive, I find reading one or two a year is plenty.
aren’t we in the middle of comments about an article saying that price declines can drag on long past an economic recovery?
Its a victory for members of team Bull like me as long as prices of brownstones don’t go down more than 20% or so. They are not going down 50-70% and that’s why Team bear loses.
DIBS, that might be true with stk mkt but still not buying it for real estate. When prices go up, then it’s victory for team bull. until then, it’s TBD (bear in the lead)
great news! sebb, can you show me a three bedroom near the park?
sebb…when Roubini says it, and he will, these fools will be all over themselves buying in the market.
daveinbedstuy : Thanks for posting that.
If Krugman who is a big bear is saying things look brighter than the bears on this site are finished.
Ohhhhbodega….read down….ever heard of paul Krugman????
Nobel Laureate Krugman Says Recession May End ‘This Summer’
June 8 (Bloomberg) — The U.S. economy probably will emerge from the recession by September, Nobel Prize-winning economist Paul Krugman said.
“I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,†he said in a lecture today at the London School of Economics. “Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing.â€
““Things seem to be getting worse more slowly.”…that’s what’s meant by first derivative. Learn something, fool
OK, sorry. I just need to take a break. once you sell it, you have cash which would also be subject to estate tax. so it’s not simply “better to sell it”. but still not the freebie that it looked like for a minute.