patrick.net

When was it not an illusion?

Good point.

Shiller: A shill.

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

epitaph says

Shiller: A shill.

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

not that i can recall. i think he's one of those perma-bears like Schiff, only a milder version, while Schiff is a hardcore Gloom & Doom advocate/hopeful.

the FHA has been in operation since when? 1930's? why is it suddenly an "abnormal" thing? not to mention the fact that it's been increasing it's premium every year since the crash.

"we have seen this in 2009" no we didn't. we had a huge inventory back in 2009. this guy is full of it now.

What exactly "positive" would you expect him to say about the economy or housing?

One of the most respected, thoughtful, and intelligent economists of our time.

But we should take the advise of a couple of jackasses on a housing blog that say he is a shill, and full of it.

ROFL!

Mark D says

the FHA has been in operation since when? 1930's? why is it suddenly an "abnormal" thing? not to mention the fact that it's been increasing it's premium every year since the crash.

What are you talking about? He didn't say anything about FHA. He said:

"“But it’s also a very bad housing market in that most of the mortgages are being supported by the government, and we have the Fed and this buying program. It’s a very abnormal market. There’s a lot of uncertainty going forward.”

The FHA was originally a program to help low-income people buy houses. That's nothing at all like what's going on now. You do know about the government supporting most mortgages now, and about the Fed buying up trillions in housing debt, don't you? This is not standard practice historically.

Inventory falls but sales don't increase proportionately, because home buyers are by-and-large home-owners, already. The market has improved, but "not enough", because those owners are still upside-down. The market has to improve substantially to make up for the stubbornness factor, and it won't.

There is nowhere except the Fed for this money to come from. The Fed must continue covering the bad bets just to keep the status quo. Now that the election is over, we'll see some ugly jobs reality in this first quarter. Krugman will scream that the Fed must double-down, but they won't be able to, because the lack of faith in fiat won't begin in the US. We'll see the currency wars force the global public to lose faith in the fiat.

I for one would sell now at a loss, if I found myself in the situation. There has been a substantive change in the real estate supply/demand relationship. The sellers ARE the buyer and the prime target audience is sitting it out.

Who is the prime target? I am.

I'm 50, have plenty of cash to drop on a down payment, but live in a state with high property taxes. So I've rented beautiful homes my whole life for bargain rents. I have such an impeccable history as a fine renter that I have been giving my last few landlords applications before I agree to any lease. Too many landlords are in financial trouble, and I don't want their economic woes ruining a good deal for me. As a result, I have lost all desire to ever own a home. It's no longer part of my American dream. As far as my kids are concerned, all they know is...we have always lived in sweet places.

Well, we always have the FED to contend with.

Shills calling the non-shill Shiller a shill?

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.

Property Market = PUMP & DUMP!

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.

John Bailo says

I keep thinking, and maybe it's just a revenge fantasy, but for the past 30 years, it always seemed like everything was just out of reach. Like I'd make more money, but then houses went up 2x, 4x, 10x in cost

You are not the only one. I suggest you look farther afield for your property investments.

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.

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.

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

Recovery upside is late 2016 in my humble opinion.

Waiting - I don't know if anyone can say that the price gains will stick.

With all the Fed/Helicopter Ben stimuli, interest rates 30 % lower as compared to last year, inventory 34 % of what it was last year (at least in the SF Bay), house prices have managed to eke out some impressive gains.

I am not sure if the gain is driven by demand, or rather by a combination of diminished supply (some of it may well be temporary) and Fed stimulus.

Waiting to see if the upturn is permanent, or just a head fake. Hope - there is more clarity in the next few months

mbSFBay says

I am not sure if the gain is driven by demand, or rather by a combination of diminished supply (some of it may well be temporary) and Fed stimulus.

Waiting to see if the upturn is permanent, or just a head fake. Hope - there is more clarity in the next few months

They will find a way to blow up a bubble. They always do.

Homeboy says

Mark D says

the FHA has been in operation since when? 1930's? why is it suddenly an "abnormal" thing? not to mention the fact that it's been increasing it's premium every year since the crash.

What are you talking about? He didn't say anything about FHA. He said:

"“But it’s also a very bad housing market in that most of the mortgages are being supported by the government, and we have the Fed and this buying program. It’s a very abnormal market. There’s a lot of uncertainty going forward.”

The FHA was originally a program to help low-income people buy houses. That's nothing at all like what's going on now. You do know about the government supporting most mortgages now, and about the Fed buying up trillions in housing debt, don't you? This is not standard practice historically.

What a stupid idea helping low income people buy homes. This ratchets up the price of housing which hurts, you guessed it, low income people.

Thedaytoday says

They will find a way to blow up a bubble. They always do.

I am appalled at the collective amnesia our societies seem to be prone to.

I guess - Govts. love a bubble - inflate the asset prices, and tax collections will follow - maybe that is the intention.

Nobody seems to be looking back and thinking about the excess leverage that got us into the crisis. Instead of pulling back on the leverage - which probably is bigger now then when we entered the crisis - they are congratulating themselves on a job done well - banks have been re-capitalized, given a gentle slap on the wrists (with a wink and a nod to go forth and leverage up the wazoo).

Don't know who will be left holding the bag in the end ? Not sure if Society's future productivity gains will be outsized enough to stave off disaster.

StillLooking says

What a stupid idea helping low income people buy homes. This ratchets up the price of housing which hurts, you guessed it, low income people.

It became far worse when they expanded the price limits and started helping RICH people to buy homes.

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.

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.

Raw says

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

It's the real thing.

LOL

HousingBoom says

Raw says

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

It's the real thing.

LOL

LOL

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!

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.

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.

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.

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...

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.

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.

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.

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

http://www.youtube.com/embed/d__GPqOVNbE

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

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.

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

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

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.

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!