Predictions From the Man Who Called the Housing Meltdown
Jennifer Schonberger: What is your take on the state of the housing market now? Are you worried?
Robert Shiller: With the housing market, it’s really hard to tell because we’ve had a huge recovery in the housing market. Prices are going up rapidly now. … It’s going up so solidly at the moment. But on the other hand it all looks risky, too. So I think we could see new lows in home prices.
Schonberger: So, then, you think there could be a “double dip” in housing prices?
Shiller: Probably nothing dramatic. The most likely scenario is that we might lose some ground in the housing market, but not a whole lot. Housing prices haven’t shown that much business cycle correlation. Housing prices in real terms didn’t do a lot in the Great Depression, and they were actually rising in the later Depression.
So I just don’t see any clear path for housing prices. My best guess is that they might stay around where they’ve been in the last few months. They might go up for a while, then come down and stay leve