Robert Shiller who started the Case-Shiller index, is VERY bearish on housing. He thinks that housing might be depressed for the next 20 years, as they were in the early 20s.
Shiller thinks the housing busts will change peoples’ perception about housing for years to come, just as the great depression, cause people to rethink stocks for many years to come. Shiller notes how awful housing has done since 1890, only returning 18% on an inflation adjusted basis!
Shiller is not some economist who is constantly making wrong forecasts. He is a one of those economists who has been dead on in his forecasts. Shiller is an expert on behavioral finance, which is vital for any investor to understand, regardless of the asset class they are investing in.
Few macroeconomic prognosticators have been as correct as publicly at crucial moments as Yale’s Robert Shiller, whose first and second editions of the Irrational Exuberance (a book I highly recommend)laid bare, with remarkable timing, the speculative bubbles forming first in the Internet-crazed stock market and next in residential real estate. Shiller is a professor of finance at Yale and the co-founder of investment firm MacroMarkets LLC. He recently teamed with Nobel laureate George Akerlof to write Animal Spirits: Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism.
Shiller in late February 2009, gave an interview in which he stated stocks were undervalued for the first time in 15 years. The market fallied since ~100%.
Below are some very interesting interviews Robert Shiller did yesterday. The first interview is the best, but they are all really good. If you do not have time to view them all, I highly recommend at least watching the first video, and bookmarking the other interviews to watch on a different day.