Home prices may fall by up to 25 percent: economist
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WASHINGTON |
WASHINGTON (Reuters) - U.S. home prices could fall another 25 percent from current levels, influential economist Robert Shiller said on Tuesday.
"My intuition rates the probability of another 15, 20, even 25 percent real home price decline as substantial. That's not a forecast but it's a substantial risk I think," Shiller told reporters on a conference call.
U.S. single-family home prices fell for the sixth month in a row in December, bringing them closer to the low seen in 2009, according to the S&P/Case Shiller composite index of 20 metropolitan areas.
(Reporting by Corbett B. Daly; Editing by W Simon )
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Comments (3)
sunnysimon wrote:
The two significant drivers of home prices are the terms of finance (interest rate and term) and wage inflation. Two see this relationship graphically visit this interactive website www.homeflator.com.
DrJJJJ wrote:
We’re looking at a generation of deflation ala Japanese style! Wages will need to fall too! We’ll need some sort of fairness index for public vs private sector wages cause the public sector will fight this the whole way and the private sector won’t have a choice! Watch how public sector unions react this year for previews of coming attractions! We need to be lean and responsive or this will be prolonged and it’ll take leadership we don’t appear to have!! Tea is starting to look real good and honest about now!
bajapoledancer wrote:
I have stated for several years now that home prices will fall to levels in line with real wages….median home value will fall to below $100K or lower.
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