Robert Shiller On the Changing Psychology Of Homebuyers

Yale University economics professor Robert Shiller talks with the Bob O'Brien of Barron's about the changing psychology of homebuyers.

Comments

[famos:]

Nice to have your conclusions confirmed, i.e. I am in agreement with your gueat. I am a building contractor, house prices in particular, were well over priced. Now, perhaps they will come back to reality.

2008 Feb 27 03:59 PM

[Marudai:]

Many friends of mine still suffer heavy housing loan
repayment burdens in Japan. They bought houses around early 90's. The worst thing is that we were not aware of what the bubble was or where was the bottom in the real estate market when the prices were dropping. Just feel still overpriced in the US.

2008 Feb 28 02:06 AM

[Blackburn:]

Is this time different? No, but if one takes the longer view of US culture as it relates to housing, one finds about a fifty year trend that has to be readjusted. We first went to two income families, then both incomes became more equal, then new household necessities arose. Next, safety net type pensions went away giving rise to 401ks and the like...do it yourself.
Not being a nation of savers, we did not do it ourselves. Housing prices rose as interest rates declined and home prices reflected not only lower interest rates but the view that ever increasing equity in the homestead would replace retirement planning. New instruments came into being in the mortgage market with a worldwide demand for higher yield. Yield spreads between prime and sub-prime loans became near zero thanks to the rating agencies valuation of CMOs and their cousins. Meanwhile US folks borrowed on this new equity to subsidize new necessities. Then it stopped. Deleveraging is painful and takes some time.
William Blackburn, St. Petersburg, Florida

2008 Feb 29 11:36 AM

[MarkO:]

As Realtors we find it remarkable and somewhat bizarre that many sellers still don't believe that insights like Schiller's (which are echoed these days in various print and broadcast media) apply to them; but to someone else. The same sellers of course find it easy to accept it when housing prices go through the roof. Human nature I guess?

2008 Mar 03 04:13 PM

[ErickMcG:]

Bob Schiller was one of the few people back in the mid-2000's saying "people, stop, this is a bubble, it cannot be sustained", but no one took his numbers seriously. Back then, he was a crackpot. Now, he's a farking genius. I'm sure he's enjoying the irony :)

Nov 20 08:31 PM