The Next Leg Down in Housing
Posted By Barry Ritholtz On June 23, 2010 @ 9:30 am In Economy,Psychology/Sentiment,Real Estate | Comments Disabled
[1]I guess we shouldn’t be surprised about what economists think regarding residential Real Estate. After all, most of the profession missed the housing boom & bust in real time. Too many of the dismal set are still wed to the incorrect idea that we had a housing bubble when the evidence is overwhelming that we had a credit bubble. They misunderstood the impact of the housing boom & bust on the economy, and completely missed the the impact of subprime lending.
Based on that, I do not what to make of the latest, belated downturn in RE expectations by economists [2]. 56% of the 106 economists and analysts surveyed expect home prices to decline this year. That’s up from 40% a month ago. (Data from Professor Robert Shiller’s monthly housing survey [3], of which I am a participant).
I’ll have more on this tomorrow morning . . . for now, New Home Sales are due momentarily. . .
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[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/06/Shiller-survey.gif
[2] RE expectations by economists: http://online.wsj.com/article/SB10001424052748704853404575322604214582736.html
[3] monthly housing survey: http://www.macromarkets.com/recent_news/press_releases/2010/20100623_housing-survey.pdf
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