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Housing expert says prices fragile

Tuesday, July 26, 2011 - 01:49

July 26 - Housing prices rose from April to May, but were down from a year ago, and could head lower as the debt stand-off in Washington threatens to paralyze potential buyers, according to housing expert Robert Shiller. Conway G. Gittens reports.

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The spring home buying season may be offering a glimmer of hope that the worst may be over for the steepest housing downturn since the Great Depression. When seasonally adjusted, home prices were flat in May from April, with April's number's revised to show a gain, according to the S&P/Case-Shiller index of 20 metro areas. Prices were down, though, when compared to the same time last year. But May was actually the second month of gains when just looking at the raw numbers. Yale University Professor and S&P Case Shiller index co-founder Robert Shiller. SOUNDBITE: ROBERT SHILLER, CO-FOUNDER S&P CASE SHILLER INDEX/YALE UNIVERSITY PROFESSOR (ENGLISH) SAYING: "It's looking a little bit more positive but it's not strong news yet. And you have to remember that we've been in a declining phase for most of the last five years, so I wouldn't assume a lot about this yet. But yeah, it's looking a little bit better." Some economists caution the spring buying season may be distorting a reality where home buyers are still reluctant to sign on the dotted line, meaning the gains may be only seasonal. SOUNDBITE: ROBERT SHILLER, CO-FOUNDER S&P CASE SHILLER INDEX/YALE UNIVERSITY PROFESSOR (ENGLISH) SAYING: "You know this budget crisis - - is - even if we have a good scenario where we get a compromise, it's going be a compromise where the government cuts spending, more people are going to be laid off, confidence is not really enhanced by that, we likely have a weak economy going forward for years. And this is the pattern we've established in the last couple of recessions and this one it's worse." And given that economic backdrop, Shiller believes home prices can easily decline once again. Conway Gittens, Reuters

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Housing expert says prices fragile

Tuesday, July 26, 2011 - 01:49