From the Wall Street Journal;
“Yale University economist Robert Shiller, pioneer of Standard & Poor’s/Case-Shiller home-price index, said there’s a good chance housing prices will fall further than the 30% drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15% since their peak in 2006, he said.”
{ 2 comments… read them below or add one }
Brian McMorris 04.27.08 at 11:55 am
Very interesting quote by Dr. Shiller and his insight should not be discounted! This prognosis fits the trends that are showing on the price charts and fits what I have predicted for Phoenix based on John’s charts ($165K average price by 2009).
This does not mean the rest of the economy is Great Depression like. There were many simultaneous declines the comprise the Great Depression, and little in the way of gvmt safety nets to cushion the declines. The farm market crashed (probably won’t happen this time with global food demand), unemployment went over 20% with a manufacturing industry crash (we don’t employ many in manufacturing now, which is one of the perks of outsourcing), gvmt erected trade barriers that exacerbated the problem (hopefully, we avoid that this time, though there ARE some worrisome signs this election season), the banks crashed and closed (so far the Fed has protected the banking system this time), and more.
Our economy can probably handle one big crash at a time. We handled the Tech Stock crash of 2000-2002, which was just as large in magnitude as the 1929-32 crash if you look at NASDAQ. The DOW Industrials back then was like the NASDAQ today and the stocks that crashed big were the tech stocks of 1929 (like GE, RCA and Westinghouse).
So, it could happen, but should not be reason to panic, unless you are unlucky house buyer from 2003 to 2007.
Laura Faatuiese 03.08.09 at 5:25 pm
Hi,
I am thinking about relocating to Phoenix very soon to be close to family members since my mom just passed away here in Ohio. If you were me, would you wait to purchase a home to wait for the housing prices to drop even more, or would you purchase now? I am looking in the Goodyear, Avondale, and Peoria areas, and looking to spend around $150,000. I would rather wait to get more for my money, but at the same time, I do not want to wait and then prices start going up again.
Please advise.
Thanks,
Laura Faatuiese