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S&P Housing Summit Coverage: Robert Shiller
To open this morning’s Standard & Poor’s Housing Summit was Robert Shiller, Arthur M. Okun Professor of Economics, Yale University, Co-Founder of S&P/Case-Shiller Home Prices Indices.
Here is a brief recap of his presentation: Unusal Factors Influencing the Outlook for the Housing Market. Download the presentation: Robert Shiller Presentation_S&P Housing Summit 5.9.11.
Robert Shiller, co-founder of S&P/Case-Shiller Home Price Indices. said “a decline (in the housing industry) over the next five years would not surprise [him] at all.”
Shiller, addressing Standard & Poor’s Housing Summit, perceives the most recent recession as a phenomenon, a combination of national attention in real estate and a general loss of perspective.
”One can’t just assume that this in just another recession, implicating that there are no previous instances that statisticians can use as a comparison.” For this reason he believes predictions are extremely difficult to make. “There has never been a bust of this proportion before, even considering the Great Depression. Therefore, it is crucial to recognize that this bubble is so unique. It is now impossible for statisticians to forecast.”
Shiller, Arthur M. Okun Professor of Economics, Yale University, said the double dip in real estate prices received too much attention in the media. He said over the course of American history, people have shifted from land speculation to home speculation. “The attention to home prices is one of the factors that creates, and facilitates, the volatility that exists in the market, Shiller said.
Shiller said “where speculative markets behave randomly, the housing market is remarkably smooth, although random upticks and downticks do occur. For instance, the housing rates are down again but this could be a seasonal result of the extreme winter that occurred in the 2010-2011 season.”
Shiller said downticks like the recent 3/10 percent increase in the unemployment rate, have other larger effects. They tend to generate lots of negative vibes and direct attention to the statistic, consequently creating fear that the nation is on another downward spiral.