Skip to comments.SHILLER: Enough With The Happy Housing Talk -- House Prices Will Be Flat For 10 Years
Posted on 05/01/2013 10:55:14 AM PDT by blam
SHILLER: Enough With The Happy Housing Talk -- House Prices Will Be Flat For 10 Years
Bernice Napach, Yahoo Daily Ticker
May 1, 2013
More good news on the housing market. Yesterday, the S&P/Case-Shiller Home Price index posted its biggest annual increase since 2006just before the housing market crash.
Home prices in all 20 metro areas included in the index rose for the second month running. Phoenix led, with a 23% annual increase followed by San Francisco (18.9%), Las Vegas (17.6%) and Atlanta (16.5%).
Still, Robert Shiller, co-creator of the index, is cautious. Theres a lot of excitement in the housing market now but it might be just short term, he tells The Daily Ticker.
Shiller says the housing market is operating in an abnormal economy where the Federal Reserve is buying $40 billion worth of mortgage securities and $45 billion worth of Treasury notes each month. This has driven mortgage rates to record lows.
According to Freddie Macs weekly survey out last Thursday, the average rate for a 30-year fixed rate mortgage is a record low 3;4%; for a 15-year fixed rate mortgage its a record low 2.61%.
The Fed will eventually stop buying these securities, says Shiller, and mortgage rates will rise.
Shiller, also an economics professor at Yale University, says the biggest home price increases now are seen in multifamily rather than single family homes which reflects a shift from home ownership to renting. The buyers are investors who rent their properties.
When asked where this all leaves the housing market 10 years from now, Shiller says home prices will be about where they are now after adjusting for inflation.
(Excerpt) Read more at businessinsider.com ...
I have long been convinced that the current run-up in home prices is a false high, senior staff attorney at the Empire Justice Center Ruhi Maker, a New York nonprofit, tells American Banker. Once all these foreclosures are through the system, we could see another decline in prices.
False high, indeed. Bankers cannot control the market forever.
There is lots of vacant inventory just waiting to hit the market. When it does that will be the time to buy. Not now.
Theres a lot of excitement in the housing market now but it might be just short term,
And those underwater now will be underwater then...They will continue flushing money for the next ten years
Well...he’s an idiot...
from June 2012 to Jan 2013 my appraised value rose 13.2%
County Assessor reported last Friday that the average was over 9%.
I believe this. In the last 5 years, there has been no change in prices and sellability in my 90+ home subdivision.
My house is valued a little less (by the county assessor) than the day I moved in 10 years ago. Do I care? Well, no...I paid for it with cash, so it is a place to live for me, not an ‘investment’ I HAVE to count on to be solvent. I don’t have to pay rent or a mortgage - that hasn’t and won’t change, that’s all.
Of course the “assesors” are going to raise the appraisal values.
They have to continue feeding their worthless government employees unions.
Where in Colorado do you live? The Springs? Denver? There are always pockets of appreciation, usually tied to government centric locales. DC is the prime example. It’s boomtown there, the rest of the country is paying for it.
Tru dat brudda...
Funny how county assessors always have such a positive view, it’s almost like the county somehow benefits from rising real estate values.
I PAID FOR AN APPRAISAL!!!
It had 4 comps in it!!!
See Post #10
“Well...hes an idiot...my appraised value rose “
I’m pretty sure the author wasn’t talking just about your neighborhood.
“House Prices Will Be Flat For 10 Years”
Maybe good news. Our houses are supposed to house us, not make us rich. Our latest housing trouble is because too many viewed housebuying as a means of making money.
I’ve been in the real estate business 35 years. All real estate is local. My area is still flat even with low inventory. Some of the low inventory is due to the fact so many sellers are under water and can’t sell.
I’m pretty sure I’ve seen this author’s conclusions refuted all over national TV Finance shows this week....
as the dollar devalues, expect home prices to rise.
this does not mean the value will rise.
the value is effected by demand... which would drop as unemployment remains high.
the combination of the two would see dropping value but stagnant prices.
Shiller says home prices will be about where they are now after adjusting for inflation.
In another 5 years we will all be billionaires (or better) and a McCoffee will be on the value menu for $20,000. But our salaries will be half the current amount (adjusted) and there will be absolutely no sales to back up the valuations ... no new construction either as a single 2*4 will be $60,000 and most trade supplier companies will be bankrupt.