Karl Case (of -Shiller) argues for homeownership

Karl E. Case, professor emeritus at Wellesley

Being a real estate broker, I hardly can let pass without comment an op-ed piece in the Times last week.

It was written by Karl E. Case, one of the two economists behind the S&P Case-Shiller Indices. Although I regularly object to putting any stock in those numbers for residents of Manhattan (because the statistics embrace whole regions and include only single-family homes), I don’t have reason to believe that Case has any particular axe to grind.

In his column, Case makes this remarkable statement:

But housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we’ll even start building again. The American dream is not dead — it’s just taking a well-deserved rest.

Prior to ending his long piece, Case referred to a house as an investment with a return that comes in two forms: the opportunity to have shelter and today’s low rate of interest. To prove the point, he does the math.  In addition, he suggests that demographics and reduced construction of late may produce a housing shortage.  Or not.

Of course, he’s correct about the decline in housing prices. But the question on everyone’s lips is whether there are better bargains to come.

Even if not, as I ceaselessly say, price predictions should be an inconsequential consideration for someone who has an overwhelming need or desire to change his or her lifestyle, plans to remain in the new home for several years and is certain of sufficient resources to continue paying the bills.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

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