One-on-One with Robert Shiller
By Greg Hunter’s USAWatchdog.com
The One-on-One series continues with Yale Professor Robert Shiller. He predicted the current housing meltdown which is now five years old. If you think we are at the bottom, think again. When asked, “If the current housing crisis was a baseball game, what inning would it be?” Shiller replied, “Maybe we’re in the fourth.” Shiller recently said that home prices may not recover “in our lifetime.” He cited the Florida land boom in the 1920’s, where prices did not rebound for a “half century.” Shiller adds, “There are a lot of long term doubts about home prices right now.” If real estate does not recover “in our lifetime,” what about the banks still holding it? Shiller called that a “dark scenario.”
Shiller says, “A lot of people have the mistaken impression that we must be at a bottom.” He goes on to say real estate could go up in price but “There is also the risk of further substantial drops in home prices.” Please join Greg Hunter as he goes One-on-One with Robert Shiller.
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About the Author
Greg Hunter
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.
Out here on the Western Front 90% of the current homes sales are “short sales” & prices are still slipping inch by inch; the exception is farm acreage holding good due to high commodities prices. Owing a home today, if you don’t already have one, is more than likely a very poor investment and that same type property could be leased cheaper.
If foreign investors want to buy American homes they better well be willing to live in them or the vacancy rates of their properties will be a loss for them as the average American is down scaling and looking for average rent; so I don’t see foreign investment likely to cause another boom; movie star type homes always an exception.
Let me try and sum up the interview as follows: Anything can happen, so much for a Yale education!
Thank you Art!!
Greg
Greg,
“Insight: Fed knew of Libor issue in 2007-08, proposed reforms” Comment on Hunters top story. So, the Fed knew but didn’t tell so helped these guys commit fraud?
George Too,
It sure looks that way to me.
Greg
Great Interview! Why do we not hear this on the MSM? All I hear is “Buy now” as mortgage rates are at all-time lows. What does it matter WHAT the rates are if you don’t have secure employment?
Good point George Too!!
Greg
Thanks Greg
And of course Mr. Schiller is right. Year after year since the Regan years I tried to learn and understand whether natural market forces caused peace and chaos in our capitalist world or if there were a few rotten apples in control who knew exactly what they want and have the patience to wait until they get it.
I know what my answer to this question is and believe all systems to be rotten for the same reason.
Case in point: http://www.batr.org/negotium/071112.html
Since making my descision, I am no longer trying to prove (to myself anyway) that there are rotten apples. My problem now is what to do about it. In my small circles, I have been able to convince many people over the years, they are being screwed. It takes much patience and humility but has been rewarding.
Thank you Jim for supporting this site and for weighing in.
Greg
Correction, Mr. Shiller. The Treasury Bond bubble is the largest bubble in world history, collapse still to come.
Greg,
I like your one on one interviews, you get right to the point….hope you have more.
Alyce,
I will. Thank you for the comment.
Greg
Greg:
Your site rocks because you have great content and it is easy to navigate with all of the news. Many of the other sites, have 100’s of things to click.
The simpler the better.
Thank you.
Reese
Thank you Reese. We did not talk about the shadow inventory of housing but if you want simple, remember, Dr. Shiller says we are in “about the 4th inning” of the housing crisis. It has already been 5 years since the peak and that tells me we have more than 5 more years to go before this is over.
Greg
Greg:
Great interview with Dr. Shiller! Also, really like your web site because it is easy to find info and navigate with out all of the nonsense.
Thanks for your hard work.
Was their any feedback in regard to the “Shadow Inventory” and when it will be released on the market? The banks are sitting on inventory to get the prices up, hence creating artificial demand.
Please let me know. Thank you.
Reese Freyer
Atlanta, GA
You only have to look at the mortgage foreclosure projections by type loans, to see they will not clear the bank books till after 2016.
So the housing market does have a way to go before it bottoms.He did mention the FDIC. What good is FDIC when the buying power of our money is eroded by Quatative Easing. How much of the increase in the price of a home is due to the increase of the cost of materials to build it. So you can buy a home with a very large price but the quality of the home goes down buy using less or lower quality material. Example is that a wood 2×4 is not a 2×4. How many new homes have foundation, drainage, wiring and insulation problems as these 90 day wonder homes sprung up all over the country. What happened to the building code enforcement? Chinese made drywall that had fungus problems.
You have to take into consideration who is going to buy new homes?
You need a job. How many are now unemployed? How many companies, like GM were bailed out by taxpayer dollars and are building factories in China. How come nobody notices the effects of stagnant Commercial property, Ghost strip malls and town centers. Monuments to greed and stupity.
I have been in my home for over thirty years and have watched the neighborhood decline. Many homeowners have moved on to bigger homes and the new owners have failed to pay their mortgage/rent payments. The results of this were investors bought the homes and rented them to those on subsistance from the government. The turnover in occupants is high and the renters do not care for the property.
More than a few times, I have seen the landlord clearing his rental of debris left behind and spend one to two months repairing the dwelling to be rented by the same type of person who will again let it fall into disrepair. Even the more affuent subdivisions are not immuned as “For Sale” signs appear only to be hidden from high grass. The appearence of “Boarded Homes” is also on the rise.
This is the picture of the rotten underbelly of the housing market.
Sling,
Very, very rotten!! Thanks for your analysis and comment.
Greg
Greg,
There are some dynamics that are not being looked at in the housing market. The first is the overall inflation rate.
The cost of real estate has lost nearly half its previous levels but your purchasing dollar is losing somewhere close to 8% a year.
Over a decade this will have a huge impact on the actual value of real estate.
The population continues to grow and fewer houses are being built than are being removed from the market from fires, floods, hurricanes, and condemnation due to age.
Everything follows supply and demand, and the current situation of overall housing attrition will cause a housing shortage somewhere in the future barring some event that reduces population.
Nothing goes up forever, nothing goes down forever, and nothing stays stagnant forever.
The smart people do the opposite of the masses because that is the way money is made.
The best time to sell real estate is when everyone is buying.
The best time to buy is when everyone thinks it is a terrible investment.
Wealthy people understand this, and the working class never seems to learn it.
Thank you Jim for weighing in!
Greg
Imagine if it becomes a nearly all cash market. Demand could be be greater than ever and prices will still not recover. My Grandparents, on both sides, built ther own houses with no loans. There were no loans to be had in the 30’s, or before. The price of materials may sky-rocket, while resale prices stagnate for decades.
Any CFR/bankster planner can “prophesy” for street cred. It’s easy when you are making the plans. Shiller may be a “cognitive infiltrator” now. Czar CassS got his agenda approved. I see Shiller in many alt-media venues.
Sanders Research ran a piece on this Shiller character, “Shilling for a New World Order.”
AYG,
Not sure that is true. How does it help the NWO with Dr. Shiller saying we are in the “4th inning” of a housing crisis that is already 5 years old. The MSM is saying constantly we are in “recovery,” which is a great big lie.
Greg
This site is remarkable for its good grammar and lack of profanity. Thank you. Does this require much editing?
Dr. Shiller is right up there with K A. Fitz in maximum importance and minimum histrionics.
Keep it going, Greg.