Robert Shiller now is warning that house prices in some areas of the U.S. could be approaching bubble territory, Global Edge reports.
Home prices in San Francisco and elsewhere have risen by double-digits over four months and look they as if they are in “bubble territory,” Shiller contended, adding:
“It is entirely possible that even with the bad news we are getting, home prices could start a major increase. . . What happens from here will depend on people’s animal spirits and speculative impulses.”
He also predicted rising unemployment would not stop prices from ncreasing:
“Even in the Great Depression real home prices were rising with the unemployment rate above 12 percent. . . Just because we have high unemployment does not mean the stock market cannot boom and the housing market cannot boom.”
Shiller, of course, is that Yale economist who correctly predicted that the recent housing bubble would burst and gave his name to half of the flawed index that he shares with Karl E. Case.
Shiller made the bubble forecast for years. He was right, eventually. Even a clock is right twice a day.
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