- Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s. With prices already down almost 20%, it's not a stretch to think we might exceed that drop this time around.
- There are about 10 million homeowners whose debt is higher than their home value, which has broad implications for how Americans feel about their wealth and spending habits (read: more pressure on consumer spending).
- The current hopeful consensus — that house prices will bottom soon and then begin to recover — is most likely a dream. Housing markets don't usually have "V-shaped" recoveries. And even if house prices stabilize in nominal terms, after adjusting for inflation, most homeowners will continue to lose money.
Sunday, September 07, 2008
House Price Decline Could be Worse than During Great Depression
From an interview with Yale economist Robert Shiller on Yahoo! Finance:
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have not been to site in a few years - did lance finally acknowledge the bubble?
ReplyDeleteYep.
ReplyDeleteThings were seriously bad in Miami and getting worse all the time. A local real estate website used to post local market "facts and trends" monthly. It showed things like the number of houses for sale, how many sold in the last month, average asking and selling price, etc. They stopped updating the site in May. I wonder why...
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