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How Much Further Will Housing Prices Fall?

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  • Description

    Former HUD Secretary Henry Cisneros on the outlook for housing prices.

  • Duration 4:33
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Shiller co-founder Robert Shiller where this bombshell today housing prices may dive on another.

Ten to 25% the next few yeah.

Choking.

But our next guest says all due respect to mr.

-- -- -- and a -- Former house secretary Henry Cisneros.

Joining us now -- relieved theories say this Henry but tell me why do you think that it won't happen especially when.

Mr.

Schiller doctor Schiller is actually been somebody who called mini bubbles before -- popped.

Well -- David.

First twelve great respect for doctor Schiller and he's his -- is very sound and and well thought out.

I I just -- from experience and from personal experience in the field don't see the evidence -- -- gonna drop.

Much further I think tend to -- that percent is.

Exorbitant in terms of what it will drop their reasons why I believe this one.

This is a very spotty picture across the country their places where housing is actually improving now even though it's down in other places so it's a kind of -- this aggregated regional picture.

Secondly.

I think we're seeing the effect of demographics gonna continue to get traction as families continue to be formed households are formed.

We're now seeing housing prices being low long enough that people are starting to pick up.

Bargains and that will lead to absorption of some of the stock so it's a very very.

Tough picture because so many of the fundamentals or wrong but the fundamentals are in a related.

Jobs is related to the decline of housing because we need the construction jobs from housing.

And of course -- you know these these things feed upon each other so it's a very difficult picture but I I think it's overly pessimistic sitting in a drop that much further.

I personally believe the economy will steadily improve over the course of the summer and beyond.

The Fed debt -- you know will will will take the steps necessary to continue the improvement process and as it does housing is gonna come back.

Well -- you know -- -- -- agree with you because it's a positive view by the way Dave Dave Ramsey agrees with -- a 100% he's been buying up some bargains and if thousands of other people are doing the same but then you have always bad economic news that -- what your optimism in your faith in the future.

One other thing you have is -- overhang of all those people -- three million.

People who have mortgages that haven't paid one dime in a year or more.

And we've never had an overhang of inventory like that before.

Well no question them the most serious problem in the housing mix is the foreclosure problem.

And though the administration has done a good job on some fronts like the bank cut bail -- which everybody acknowledges now needed to be done at that moment.

I think of the things they tried to do the one that they've done the least well.

Is that they for foreclosure mitigation.

Should they -- secretary mr.

secretary should they have let more foreclosures happen instead of trying to rework mortgages which failed second and third times.

This is the problem the free market hadn't been allowed to work some argue.

-- at least gotten -- more painful in the short term but would have he holds the whole situation in the longer term.

Well I'm not sure that that's the case there's certainly a theory that says that you know we would have sort of gone through the -- and and come out of this by now.

My sense is that the administration needed to do a better job of engaging that credit sector the banks.

In that foreclosure mitigation efforts and that would that just we didn't do a good enough job that in the foreclosure still hang out out there there's some interest -- it actually is.

Make sure I I I heard you're right though on this -- because you're saying a lot of banks are saying they've done much to much we just -- Jamie Dimon said today.

Tell Ben Bernanke that the other day and and you're saying they should have done more they should rather than allowing these foreclosures to take place and clear out that inventory.

We should have kept people who can't afford their houses in their houses.

Well either that or or or clear the market as we did in the 1980s.

-- with the savings and loan crisis where -- Created debt situations where the -- but -- investors and others to purchase that that stock.

Some interesting ideas around about allowing investors now to -- some of the overhang of foreclosures.

And converted to rentals we know that we need more rebels were behind on rebels.

It that they the economy's changing before howling economy's changing before our eyes toward Reynolds.

This should be a strategy to take some of that inventory out of circulation are.

Thanks to former Hud secretary Henry Cisneros thank you always nice to have -- Thank you great to see as well this --

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