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Shiller co-founder Robert Shiller where this bombshell today housing prices may dive at another.
Ten to 25% the next few yeah.
Choking -- but our next guest says all due respect to mr.
Schiller just -- and a half.
Former house secretary Henry Cisneros.
Joining us now we're relieved theories say this -- but tell me why do you think that it won't happen especially when.
Schiller doctor Schiller -- actually been somebody who called mini bubbles before they popped.
Well -- David.
First twelve great respect for doctor Schiller and he's his -- is very sound and and well thought out.
I just -- from experience and from personal experience in the field don't see the evidence that it's gonna drop.
Much further I think tended -- 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.
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 -- related.
Jobs is related to the decline of housing because we need the construction jobs from housing.
And of course yeah 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 -- you know will will will take the steps necessary to continue the improvement process and as it does housing is gonna come back well I.
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 -- thousands of other people are doing the same but then you have -- as bad economic news that counters what your optimism in your faith in the future.
One other thing you have is as overhang of all those people there -- 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 -- is the foreclosure problem.
And though the administration has done a good job on some fronts like the baked cut bail out 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 -- for foreclosure mitigation.
And should they have the 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 haven't been allowed to work some argue.
Would have at least gotten even more painful in the short term but would have he -- 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 of that in the -- still hang out out there there's some interest when it actually has.
Make sure I I I heard you're right though on this -- because you're saying a lot of banks are saying they'd done much -- much we just heard 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 we'd.
Created debt situations where the bit of 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 -- economy's changing before our eyes toward rentals.
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 surgery.
Thank you great to see as well this --
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