Summary: Yale professor Robert Shiller, author of "Irrational Exuberance" says house prices have only fallen half way to fair value. Read what he has to say.
When Yale professor Robert Shiller stopped by recently to discuss Obama's housing fix, I also asked him about the housing market in general. Specifically, where are in this hisotric price collapse? Finally nearing the bottom?
Not a chance, said professor Shiller--unless the government finds some way to miraculously levitate prices again.
Despite the 25% nationwide decline since the 2007 peak, U.S. house prices have still only fallen halfway to fair value. So whatever you think of Obama's plan, don't count on a quick housing-market turnaround.
Shiller: Obama Housing Plan Too Small But Good Start
Yale professor Robert Shiller, who called both the stock-market crash and the housing market crash, is happy to see the government finally helping homeowners instead of banks.
Yes, Obama's housing plan has flaws, says Professor Shiller, who has authored a new book, "The Subprime Solution." The Obama plan is too small. It's just a short-term fix. It won't make house prices go up again. And it helps out some Americans at the expense of others.
But it's a good start.
And on the fairness point, Professor Shiller argues that the plan does, in fact, help renters and comfortable home-owners, too--because we're all in this together, and because the economy is everyone's problem.
