Robert Shiller on Why Home Prices Could Fall for Several Decades

Generali

wotsthat wrote: »

Oh No! Robert Shiller says house prices could fall in the US! It's almost as scary as when Jonanthan Davis says house prices will fall.

To be fair, Shiller has been (pretty much) on the money with the housing and CDO stuff and until the US housing market sorts itself out the world's economy will be stuffed.

ash28

Road_Hog wrote: »

The difference with the US market is that they have vast swathes of land that they can build on, we don't have that here. For example, in Detroit, there are huge areas of brownfield sites, where empty building and properties stand that have been abandoned.

Yet still, new properties and buildings are being built on greenfield sites, because it's cheaper and they don't have to knock down and clear the old building.

They also have vast swathes of land that they can't build on. The crash wasn't uniform across the US it was mainly centred in 11 areas - areas that had and have restrictive planning laws - they call them slightly different things over there - compact city policy, smart growth and growth management are a few, they have high denisty housing in urban areas and then very low density housing outside those areas. In those areas when demand and started to rise due to easier lending they were unable to respond to demand and prices rockected.

The areas that were most affected were Los Angeles, San Francisco, San Diego, San Jose, Riverside-San Bernardino, Sacramento, Las Vegas, Phoenix, Miami, Tampa-St. Petersburg and Washington DC. Those areas suffered a lot from speculators too - our friends who live in California were "flippers", buy a house - do it up and sell it at a profit and if you employed Mexican illegals it didn't cost you very much either - prices were rising so quickly you couldn't lose - and they had the same sort of tv programmes as the Sarah Beeney one - I can't remember what it was called. Other areas didn't have the same level of speculation because there wasn't the money in it because you could build a house more or less where you wanted.

Other areas like Dallas where planning laws are relaxed didn't see the huge price increases or the subsequent falls.

In a lot of states people are able to walk away from their mortgages if they are in negative equity or unable to pay the mortgage for what ever reason and they can do it with no recourse. In those states the house is security against the loan - you walk away and the lender is left with the house and you owe no money, your credit rating is shot to pieces for a few years but for a lot of people it's worth it.. It's not the same in all states. Here it is different - you are responsible for the loan and you will be chased for the outstanding amount regardless.

There are a lot of reasons behind the US housing crash - finance being just one of them.

geneer

robmatic wrote: »

And everyone sticks with the point of view that they had at the start regardless of the outcome of the sums.

yet on one side the outcome was the crash.

Seems to me that the "everyone is as bad as each other" meme is just another fall back position, with all the bias and lack of consistent logic that implies.

tartanterra

geneer wrote: »

Seems to me that the "everyone is as bad as each other" meme is just another fall back position, with all the bias and lack of consistent logic that implies.

....Oooh......the irony........:rotfl:

geneer

tartanterra wrote: »

....Oooh......the irony........:rotfl:

well the irony is that house prices did indeed crash, and your bias and lack of consistent has been highlighted by your interjection.

wotsthat

geneer wrote: »

1) Risky lending in both countries.
2) Economic collapse in both countries.
3) Bubbles in both countries.
4) Crashes in both countries.

Apart from that, completely different wotsits.

There's some pretty big statements there - none supported by evidence.

What risky lending? Aren't repossessions and arrears quite low?

Economic collapse? Really - how would you define collapse?

Bubbles in both countries? What housing was in a bubble or still is?

Crashes in both countries? Depends where you are. London hasn't crashed and neither have more desirable cities in England and Scotland. Crash seems to be over-egging it a little.

Really2

crash123 wrote: »

How much of Britain do you think is built on?
Answer not very much

England has around 395 people per Square Kilometer
the USA has around 32 people per Square Kilometer.

That would seem to indicate we are fairly crowded and have less available land to build on, especially if you look at areas such as greater London where population density is over 4700 people per Square Kilometer.

It is fairly obvious by such stats that english house price falls will not mirror the US.

purch

and they had the same sort of tv programmes as the Sarah Beeney one - I can't remember what it was called

Just looking through an old DirectTV guide....

The Real Estate Pro's on TLC Discovery
Flip that House also on TLC Discovery
Flip this House on A&E
Property Brothers on Real Style Network
Income Property on Home & Garden TV

.........there were/are many :eek:

and of course Sarah Beeney and her enormous bosums also had a program on one of the cable channels too.

purch

To be fair, Shiller has been (pretty much) on the money with the housing and CDO stuff

Well the S&P Case Schiller Indices have been around since the 80's, so he should have some idea what's happening out there :eek:

Cleaver

geneer wrote: »

meme is just another fall back position, with all the bias and lack of consistent logic that implies.

For once I completely agree, but I'd add that the assertion on the bear side regarding the 'crash vs non-crash' meme peddled by the bulls is still as false as it was in '07.