It’s up and down, a rollercoaster. We’ve seen a big decline since 2006. Then we saw a recovery starting in April, and now it’s flattened out, and it’s looking ominous. Most of our cities are actually declining a smidgen, so we’re wondering, “Where are we going?”
There’s a huge shadow inventory of homes that might be dumped on the market, because the government support for the market is perhaps temporary. And public confidence, which is being supported by this government support, is limited.
I wrote my book called “Subprime Solutions.” I regret that title now, because it’s looking less like a subprime crisis. Maybe it has a better name, something like “World Financial Catastrophe.” The real problem is that we had a depression scare. I’m not making this up – every head of state in the world talked about the risk of depression. Confidence has come back, but confidence is so volatile, and if we have more things like Dubai World, we have more bad news on high end housing, or whatever, it can drop again. Double dips in history are rare, but this is one of those times when I worry about it.
– Robert Shiller, co-founder of the S&P Case-Shiller indices, speaking to the Wall Street Journal this morning.
The impact of the massive government effort to support house prices led to small increases in prices over the Summer, and the question is what happens to prices as these programs end over the next 6 months. I expect further price declines in many cities.
– Calculated Risk‘s initial reaction.
Case Schiller basically flat for chicago real estate… I expect trend to continue in 2010 with some downside/upside on neighborhood basis.
With the rush of so many first time homebuyers to close on their home purchases before the initial tax credit deadline of November 30th, I’m surprised by the drop. I saw many multiple offers pushing up sale prices in October.