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Yale Economics Professor Robert Shiller on the most recent data from the S&P/Case-Shiller Composite Index.
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Where is the bottom everybody home prices hitting new post crisis lows according to latest case Shiller report.
Falling eight tenths of a percent in February from January.
Down three and a half percent from a year ago Bob Shiller is co author has.
Index author of finance and the good subsiding.
-- economy and a professor at Yale it's good to see you Bob as always.
How much further can home prices possibly fall.
-- -- -- -- worth an area you're asking what yes I don't absolutely says her hair you're asking for the -- yes.
I don't think they'll far more than another attorney 5%.
Bet on that.
I you know I think they could fall further and you know not that much probably.
But.
Because there's a -- adjustments -- our thinking in our long run opinions about real estate seem to be changing.
-- -- -- -- not how are they changing is that causing this further price declines.
-- -- See people -- are reassessing the general idea that I have to have a big house side in the suburbs.
-- that I'll drive to every day.
Gas prices are higher -- at least -- we've gotten kind of different feeling about big houses that you that -- really want to be house small is beautiful might be coming back.
People like urban environments to cities where it's -- natural the -- you could buy a Condo to about.
-- -- -- has its advantages and people are realizing that when they see all these people in these underwater investments.
In houses.
What in some ways that it ended the value of owning a home is based on in part or should be it wasn't there in the -- how much it.
How much you can rented out for and really what did.
And in comps are in that area in in terms of the valuation of comments today.
And -- reasonably priced they are are we back to normal are we even cheaper.
Then historical norms.
Did is -- is that real inflation corrected -- never did much of anything over this whole boom.
So there was never any real change in.
In them the demand for housing it and as interpreted by what people pay their rent a place.
But we had a big bubble and yeah we're back I mean it's the margin of error but we're kind of back to where we have been for a long time on.
On the price to rent.
That we the problem is we could over shoot.
And that and that could haven't we have a big supply of housing after all this building.
And we you know it's weighing on us now -- made me take a long time to come -- -- will actually see substantial price increases.
Is that really what's causing it's shocking to look at say Las Vegas and Atlanta and still see those markets continuing to fall as they have.
Is that really what's at play in those two markets in particular is the excess supply of -- But that's a that's a factor that land it has not done -- generally the Atlanta economy kind of in terms of income growth kinda resembles the Detroit economy so it just hasn't discovered he has to rediscover itself.
But you know that that's regional it right.
I think in the longer run.
Since housing prices might.
-- tract construction costs.
And in the longer on there is no real reason to think that there -- -- have a new boom like -- we just saw.
Not -- life Tom not for sure if you look at.
Well if you look at all the different factors -- what is the most critical -- think to any sort of recovery in prices this point is it.
This up unemployment rate is -- mortgage rates what is it.
But you know part of the issue is that just the federal government still has Fannie Mae and Freddie Mac under conservative -- the government is is guaranteeing.
You know almost all of our mortgages and but we're -- we don't know where this is -- how much longer of the government's gonna do that with a huge.
Debt problem.
So you know we have to resolve that and if that were resolved in some way that encourage homeownership.
That would be a plus -- talking about scaling back the mortgage interest deduction Taylor as a way of solving the deficit.
These things there are weighing on the market right now if any is flared up through it -- Better for the housing market.
Bob great to see you Robert Shiller as always of case Shiller of -- all -- -- well Bob will cease and take care.
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