Yale economist Robert Shiller is asked by CNBC’s Rick Santelli whether he agrees with those who think the U.S. housing market has hit bottom and is now recovering.
do you think housing has bottomed? i’ve been reserving judgment, because i think these — we’ve seen rallies that fizzled before. it’s not — once it gets going, it has a lot of momentum. but right now, it could be — partly seasonal. and it’s not — it’s nouft jt clear yet. we have had a lot of false starts, and you’re right, there is seasonalality. i remember mr. greenspan in ’05 and ’06 saying you don’t have to worry about housing in terms of correlations, everything is so dissimilar, so many houses across the country. that probably staved off the bubble effects for a while until it gained traction and then it was a big rock falling. how is that going to play out in we’re bottoming when it tries to go back the other way? yeah, well, the question is, we have rallieses in phoenix and san francisco. question is, it’s really nationwide. in the last few months, it looks like it. but is this — are we going back to the early 2000s where the correlation across markets got really strong? i don’t know yet. it’s just too soon to tell. now, here where everybody trades everything, including houses, is tradeable in their minds, and my analogy, if we think we are bottoming, if i say we’re bottoming in the s&p futures, the question is, okay, i’m going to buy them, because it’s going to rally. if we’re bottoming, that doesn’t necessarily mean there’s going to be a liftoff, does it? well, i think look at the last housing cycle. it peaked around 1990, and it started falling only a little bit. it wasn’t as dramatic a cycle that time. how long did it take to take off? a decade. we’ve been going down for six years now. i don’t want to just change — no, i’m with you. it might still be going down. and we have a lot of world economic problems that are staring at us right now. the imf just came out with this report about an alarming slow down in the world. so i don’t know that i’m — i just don’t see the reason to call this yet a major turning point.