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Shiller: The Last Time Home Prices Rose as We Have Seen Recently, The Soon Fell

“The recent string of housing data shows that housing supply is tight, new home sales are surging, and pending home sales are up.  And this, analysts say, bodes well for home prices.

In an interview with The Wall Street Journal, however, Robert Shiller says he is more “worried” than most about the rise in home prices, because he isn’t certain that the recovery in prices will be sustained.

Here is an excerpt from the interview:

WSJ: Did we finally hit a floor in home prices last year?

Mr. Shiller: The trend in home prices seems to be up now. It has been going up. That’s upward momentum, which by my general rule of forecasting has been good for the future. I’ve been tentative about that. It may well be the turning point.

But I’m not sure about that. I’m more worried than most people that it could be a short-lived turnaround. It could be like the 2009-10 upturn where we saw home prices rising right after President Obama took office and right after the home-buyer tax credit was instituted. In that upturn there were some cities that did quite spectacularly. And then that fizzled. I’m not too sure that this one will extrapolate either.

WSJ: Why are you more worried than most people?….”

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