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Shiller: Housing market comeback may be an illusion


By HousingBoom   Follow   Fri, 25 Jan 2013, 1:41am PST   6,761 views   104 comments   Watch (2)   Share   Quote   Permalink   Like (2)   Dislike  

http://www.nj.com/business/index.ssf/2013/01/shiller_housing_market_comebac.html

The housing market has been declining for something like six years now, it could go on, that’s my worry,” Shiller daid. “The short-term indicators are up now, it definitely looks better, but we saw that in 2009.

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HousingBoom   befriend   ignore   Sun, 27 Jan 2013, 9:02am PST   Share   Quote   Like (2)   Dislike     Comment 25

Thedaytoday says

Property Market = PUMP & DUMP!

The entire economy is a PUMP & DUMP. We have seen the PUMP so we should see the DUMP in the near future. The sheep are falling for this once again.

Raw   befriend   ignore   Sun, 27 Jan 2013, 11:24am PST   Share   Quote   Like (1)   Dislike (3)     Comment 26

HousingBoom says

Thedaytoday says

Property Market = PUMP & DUMP!

The entire economy is a PUMP & DUMP. We have seen the PUMP so we should see the DUMP in the near future. The sheep are falling for this once again.

The real estate market is too big for a "pump and dump" scam.
It's the real thing.

HousingBoom   befriend   ignore   Sun, 27 Jan 2013, 11:42am PST   Share   Quote   Like   Dislike     Comment 27

Raw says

The real estate market is too big for a "pump and dump" scam.

It's the real thing.

LOL

Raw   befriend   ignore   Sun, 27 Jan 2013, 12:49pm PST   Share   Quote   Like   Dislike     Comment 28

HousingBoom says

Raw says

The real estate market is too big for a "pump and dump" scam.

It's the real thing.

LOL

LOL

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 1:00pm PST   Share   Quote   Like   Dislike (1)     Comment 29

epitaph says

Shiller: A shill.

Seriously, has this guy ever said something positive about the US?

yes... prices over the long run are equal to inflation and incomes... therefore people should have more to save or spend as prices go up and interest rates go down.

not something you would hear from Realtors ... ever!

Raw   befriend   ignore   Sun, 27 Jan 2013, 1:05pm PST   Share   Quote   Like   Dislike     Comment 30

thomaswong.1986 says

epitaph says

Shiller: A shill.

Seriously, has this guy ever said something positive about the US?

yes... prices over the long run are equal to inflation and incomes... therefore people should have more to save or spend as prices go up and interest rates go down.

not something you would hear from Realtors ... ever!

Not in California. Lets get real guys, for the last 50 years California real eastate has easily beat inflation and income growth. The key is population growth.

Philistine   befriend   ignore   Sun, 27 Jan 2013, 1:53pm PST   Share   Quote   Like (1)   Dislike     Comment 31

chanakya4773 says

in pre 2007 bubble, 90% of the peope i talked to were taking short term ARMS. I cannot even find one now ( atleast in my circle)

The 3.5% down FHA/3.5% mortgage took its place. It's called frying the chicken in yesterday's grease.

Philistine   befriend   ignore   Sun, 27 Jan 2013, 2:16pm PST   Share   Quote   Like   Dislike     Comment 32

chanakya4773 says

Are you seeing any ARMs ? those are usually the killers because they reset to higher interest rate

Not like in the past. Certainly not the Free Parking type of ARMs that we had in the mid-2000's (middle Oughts?). But the come-one-come-all of FHA free money loans is not a far cry if a buyer is special enough to compete in today's market.

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 2:19pm PST   Share   Quote   Like   Dislike (2)     Comment 33

Raw says

Not in California. Lets get real guys, for the last 50 years California real eastate has easily beat inflation and income growth. The key is population growth.

even with growth and all the boom in SFBA.. from 1975 to 1995.. the best you or anyone can say is its a draw.. Inflation DID NOT EASILY BEAT prices.. if anything we learned.. is even in SFBA prices went flat over that period.. and frankly.. why have we seen prices drop more recently...

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 2:23pm PST   Share   Quote   Like   Dislike (1)     Comment 34

chanakya4773 says

Are you seeing any ARMs ? those are usually the killers because they reset to higher interest rate.

they couldnt use fixed rate loans.. too costly.. so they used ARM.

at the end .. its not the mortgage used but the amount you OBLIGATED yourself to pay with a loan... THATS the KILLER.... it was never the type of loan you used..

Had prices been lower by half or more back to normal..
ARM or conventional made no difference.

Philistine   befriend   ignore   Sun, 27 Jan 2013, 2:27pm PST   Share   Quote   Like (2)   Dislike     Comment 35

thomaswong.1986 says

they couldnt use fixed rate loans.. too costly.. so they used ARM.

at the end .. its not the mortgage used but the amount you OBLIGATED yourself to pay with a loan... THATS the KILLER.... it was never the type of loan you used..

Had prices been lower by half or more back to normal..

ARM or conventional made no difference.

Nope. Wrong. Without exotic ARMs, those wishing prices would never have held. But, really, this is all ancient history.

Raw   befriend   ignore   Sun, 27 Jan 2013, 2:30pm PST   Share   Quote   Like   Dislike     Comment 36

Thomas, your chart clearly shows that Bay area prices outperforms inflation. That is what I was trying to say.
Nothing goes up in a steady predictable, so you can expect major pull backs every now and then. These pull backs are major buying opportunities, which no one should miss.
As they say....buy when there is blood on the streets.

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 2:34pm PST   Share   Quote   Like   Dislike (1)     Comment 37

nope.. price inflation came from irrational belief of home owners/buyers..
it started much earlier than than 2001. Nationally, Had nothing do with Int% rates population growth or anything else. Just like back in early 90s as inflation dropped
and all other factors..people expected too much..

Robert Shiller - On Home Prices Always Going Up

HousingBoom   befriend   ignore   Sun, 27 Jan 2013, 2:35pm PST   Share   Quote   Like (4)   Dislike     Comment 38

I remember in 2006 when most people laughed at the idea of falling home prices. hilarious!

Wages are now falling, taxes are increasing, cost of living is increasing and now home prices should go up? no way

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 2:37pm PST   Share   Quote   Like   Dislike     Comment 39

Raw says

Thomas, your chart clearly shows that Bay area prices outperforms inflation. That is what I was trying to say.

your looking at bubbles... not any real out performance... eventually it corrects.

Bap33   befriend   ignore   Sun, 27 Jan 2013, 2:40pm PST   Share   Quote   Like   Dislike (1)     Comment 40

Raw says

HousingBoom says



Raw says



The real estate market is too big for a "pump and dump" scam.


It's the real thing.


LOL


LOL

LOL

Bap33   befriend   ignore   Sun, 27 Jan 2013, 2:42pm PST   Share   Quote   Like   Dislike (1)     Comment 41

Thedaytoday says

Hysteresis says



shiller's got lots of data. that and he's always careful with his wording is what i like about him. he was also one of the first people to popularize the idea that people's (irrational) behavior greatly affects economics.


he has a deeper understanding of markets than pretty much everyone on patnet. yet, i think most readers prefer the anecdotal, unsubstantiated, hyperbolic and often retarded claims made here. sad.


Shiller is full of shit, time after time Shiller hid the truth, how many bubbles did they ignore or misrepresent and for how long!


Fuck these bitch assholes.


I was screaming at bubbles between 2000-2006, "every single financial expert" said, " it was not a bubble".


There is no BUBBLE!


Liars , thieves and murderers.

I agree 100%
reduce your caffine intake

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 2:42pm PST   Share   Quote   Like (1)   Dislike (2)     Comment 42

Raw says

Nothing goes up in a steady predictable, so you can expect major pull backs every now and then. These pull backs are major buying opportunities, which no one should miss.

no thats not the way it works.. steady predicable.. about most of the US housing has been flat on the whole..

homes are not to be traded and swapped for.. never been the case. A home is a consumable.. not a dividend paying stockor interest earning bond.

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 2:48pm PST   Share   Quote   Like   Dislike (1)     Comment 43

HousingBoom says

I remember in 2006 when most people laughed at the idea of falling home prices. hilarious!

i tried to tell some of past price declines SoCal in early 90s.. bloodbath !
but past news articles do not appear on the web so easily..
And than again.. many that come to Cali do get pumped the idea from realtors
ITS ALWAYS BEEN expensive line.. WOW ! talk about pimps and hustlers!

HousingBoom   befriend   ignore   Sun, 27 Jan 2013, 3:09pm PST   Share   Quote   Like (1)   Dislike     Comment 44

If you look at Thomas' chart, you can see that every housing boom collapsed back to pre-bubble prices. If history repeats, then we are about 50-60% done with this collapse. We have more downside.

Will this time be different? Probably not

thomaswong.1986   befriend   ignore   Sun, 27 Jan 2013, 3:48pm PST   Share   Quote   Like   Dislike (1)     Comment 45

chanakya4773 says

WRONG !! the index that you showed is INFLATION ADJUSTED.

thats right.. flat adjusted for inflation. Predictable pattern ! It should be, by now clear as daylight if a region is getting HOT as they called it back in the bubble days.. something is amiss.. and going wrong ! Cause every historical example of local bubbles as far back the 1920s Florida land speculation has ended in disaster.

Today, the only meaningful land where prices are up.. may well be the Natural Gas rich regions of middle America.. (fly over states full of people guns and bible -- now Billionaires)

But they are pumping and selling real income producing products.. you certainly dont hear Realtors talking about that.. far from it !!!

Hysteresis   befriend   ignore   Sun, 27 Jan 2013, 8:05pm PST   Share   Quote   Like   Dislike     Comment 46

epitaph says

Hes better than the boom doom and gloom guy that's for sure, but saying the recovery could take 50 years is a little far out. I can't even imagine what 2014 will be like let alone the second half of this year. I do understand that he analyzes a lot of data, more than we do here, and I know fundamentally he is right there is a lot of headwinds for this recovery. But to end it with "This might take 50 years" really spoke to me more about his character than his analysis.

nah. you're mis-interpreting what he said. he didn't say a recovery was 50 years away, he said another big bubble is far way and he threw out 50 years.

here's the quote:

He added, “I think we’re pretty far from irrational exuberance, maybe 50 years away.”

inflection point   befriend   ignore   Sun, 27 Jan 2013, 11:22pm PST   Share   Quote   Like (1)   Dislike     Comment 47

its interesting that a man is cautious in his comments is called a shill.

Zakrajshek   befriend   ignore   Mon, 28 Jan 2013, 12:00am PST   Share   Quote   Like   Dislike     Comment 48

Until interest rates are allowed to go back to historical levels, 7.5 to 8%, nobody will know what the real house prices, stock prices, bond prices, or gold prices are.

Sakman   befriend   ignore   Mon, 28 Jan 2013, 12:20am PST   Share   Quote   Like (1)   Dislike     Comment 49

Zakrajshek says

Until interest rates are allowed to go back to historical levels, 7.5 to 8%, nobody will know what the real house prices, stock prices, bond prices, or gold prices are.

Exactly, you said it perfectly. . ."allowed" to go back to historical levels. The implication is that the market is well controlled. So, while many people here are frustrated by the feeling that the market should not be moving up, the reality is that it is being controlled to do so. It is another stealth bailout, and it will continue until the banks are in a safe zone.

There are studies out there that show that in a world full of idiots...the intelligent are made to look like fools. Keep that in mind if you decide to keep your housing bear hat on.

Good Luck Out There.

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 2:29am PST   Share   Quote   Like   Dislike     Comment 50

Zakrajshek says

Until interest rates are allowed to go back to historical levels, 7.5 to 8%, nobody will know what the real house prices, stock prices, bond prices, or gold prices are.

Interest rates are the level that they always are when unemployement is high and the economy is struggling. Rates are not going to rise until unemployment falls down to historic levels.

House prices, stock prices, gold prices, or any asset prices vary with the cost of money. There is no "real" level....

RentingForHalfTheCost   befriend   ignore   Mon, 28 Jan 2013, 2:39am PST   Share   Quote   Like   Dislike     Comment 51

tatupu70 says

Interest rates are the level that they always are when unemployement is high and the economy is struggling. Rates are not going to rise until unemployment falls down to historic levels.

House prices, stock prices, gold prices, or any asset prices vary with the cost of money. There is no "real" level....

Easy to get unemployment numbers down. That doesn't mean much when many of the employed are underemployed. i.e. PhD working in retail selling shoes.
My worry is that we get the unemployment looking better and start moving interest rates up, only to find out that people still don't have any money to pump up the economy. How long do we go down this path of being broke but in denial. Years and years I bet. My kids will have a name for the 3 lost decades I am sure. They will laugh at our stupidity. FYI, I am buying gold for my kids. It'll be the best present for their future.

Ironman   befriend   ignore   Mon, 28 Jan 2013, 2:47am PST   Share   Quote   Like (3)   Dislike (2)     Comment 52

tatupu70 says

Interest rates are the level that they always are when unemployement is high and the economy is struggling.

Do you really think so ???

*

*

*
tatupu70 says

Rates are not going to rise until unemployment falls down to historic levels.

And when will that happen??

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 2:58am PST   Share   Quote   Like   Dislike     Comment 53

Call it Crazy says

Do you really think so ???

I guess it depends on what you mean when you say "interest rates". LIBOR, 30 yr. treasury, prime rate, or mortgage rate. The trends look different depending on which you choose.

Call it Crazy says

And when will that happen??

If/when we can get wealth/income disparity down to normal levels.

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 3:05am PST   Share   Quote   Like   Dislike     Comment 54

RentingForHalfTheCost says

Easy to get unemployment numbers down.

I have to disagree with that one. It's not easy at all. Even the shoe company isn't going to hire a PhD if they have enough workers to cover their needs. Employment only increases with more demand.

Looking at the US as a whole, consumers are not broke. It's a distribution problem, not a lack of money probem.

RentingForHalfTheCost   befriend   ignore   Mon, 28 Jan 2013, 6:23am PST   Share   Quote   Like   Dislike     Comment 55

tatupu70 says

RentingForHalfTheCost says

Easy to get unemployment numbers down.

I have to disagree with that one. It's not easy at all. Even the shoe company isn't going to hire a PhD if they have enough workers to cover their needs. Employment only increases with more demand.

Looking at the US as a whole, consumers are not broke. It's a distribution problem, not a lack of money probem.

We already have the gov't ability to create fake demand. This is not an open market. We can build bridges and roads to nowhere and have the whole country employed. Won't help a bit though. We need real employment in order to justify any interest rate increase. That is not going to happen anytime soon. It'll be 3 decades of lost growth when we are through. Not 1, not 2, but 3. At the heart of many of our earning years. No house purchase will save you at all, we will all suffer.

HousingBoom   befriend   ignore   Mon, 28 Jan 2013, 7:18am PST   Share   Quote   Like (1)   Dislike     Comment 56

robertoaribas says

Yes, the US economy is so bad that housing prices cannot possibly increase... That is why the have been dropping over the past 12 months...

The economy is in bad shape only because we are printing trillions out of thin air just to keep it afloat. We all know that we can't print forever and keep rates at record lows for too long. Everyone is hoping for or expects a soft landing and the Fed to GRADUALLY raise rates. I am betting that it will not be a soft landing and rates will go through the roof once the bond bubble bursts. No burst of a bubble is ever a soft landing.

thomaswong.1986   befriend   ignore   Mon, 28 Jan 2013, 7:22am PST   Share   Quote   Like   Dislike (1)     Comment 57

robertoaribas says

Yes, the US economy is so bad that housing prices cannot possibly increase... That is why the have been dropping over the past 12 months..

as you said.. SFBA is crazy wacked out place anyway.. prices makes no sense.

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 7:40am PST   Share   Quote   Like   Dislike     Comment 58

underwaterman says

It's a non-answer. Answering a question with a question.

It's the only answer. Neither I nor you know what policies the government will enact over the next 4, 8, 20 years. So how can I tell you when wealth disparity will end?

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 7:43am PST   Share   Quote   Like   Dislike     Comment 59

RentingForHalfTheCost says

We can build bridges and roads to nowhere and have the whole country employed.
Won't help a bit though. We need real employment in order to justify any
interest rate increase

This is what you are missing. If you had the whole country working, it would create real jobs because the people who currently have nothing would actually have disposable income. This would create tremendous demand, which would cause companies to increase production and create jobs. Real jobs.

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 7:44am PST   Share   Quote   Like   Dislike     Comment 60

underwaterman says

Watch tutu70 ignore or distort the evidence you presented. There is no
correlation between unemployment and interest rates as your charts
demonstrate.

As I posted earlier, mortgage rates do not equal interest rates. Why don't you look at a chart of LIBOR, 30 year treasuries or the prime rate vs. unemployment and get back with me.

ELC   befriend   ignore   Mon, 28 Jan 2013, 7:45am PST   Share   Quote   Like (1)   Dislike     Comment 61

Sakman says

It is another stealth bailout, and it will continue until the banks are in a safe zone.

You're talking like they know what they're doing. They don't. This is the first time anything to this extent has happened. If you want to risk your money in one of the greatest fraud inspired experiments there ever was go right ahead.

For me, when I see the DOJ and the FBI protecting these banksters, lying right to the camera I know it's way over my head.

thomaswong.1986   befriend   ignore   Mon, 28 Jan 2013, 7:48am PST   Share   Quote   Like   Dislike (1)     Comment 62

God forbid we actually make products we can actually sell domestic and internationally..

Build factories, plants and 2nd tier vendors who also hire and spend withing the supply chain..

but thats all dirty water and dirty air... we cant have that in the USA.

tatupu70   befriend   ignore   Mon, 28 Jan 2013, 7:54am PST   Share   Quote   Like (1)   Dislike (1)     Comment 63

thomaswong.1986 says

God forbid we actually make products we can actually sell domestic and internationally..


Build factories, plants and 2nd tier vendors who also hire and spend withing the supply chain..


but thats all dirty water and dirty air... we cant have that in the USA.

Not to ruin your good story, but I think it has more to do with the fact that people in other countries work in sweatshops for $1/day.

Vicente   befriend   ignore   Mon, 28 Jan 2013, 7:58am PST   Share   Quote   Like   Dislike (1)     Comment 64

thomaswong.1986 says

Raw says

Nothing goes up in a steady predictable, so you can expect major pull backs every now and then. These pull backs are major buying opportunities, which no one should miss.

IF ONLY that chart's dotted lines were playing out!

If it were, we'd be at or very close to an actual bottom now. Instead, every effort is extended to prop things up, so we're not there. Yet.

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