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Home price gains less than zero for long term: Shiller

03/26/2013 | 01:35pm US/Eastern
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ANCHOR (OFF-CAM) ENGLISH SAYING:

You've been cautious in the past, are you more encouraged by this latest data?

ROBERT SHILLER, PROFESSOR OF ECONOMICS, YALE UNIVERSITY (ENGLISH) SAYING:

Well, definitely we're seeing more evidence of a rebirth of the housing market. One thing I've learned over years from looking at housing market, they're very different from the stock market. They have momentum. And when they start going up, they generally keep going up for a year or even more.

ANCHOR (OFF-CAM) ENGLISH SAYING:

With prices now solidly back on the rise and consistently back on the rise, are you worried about a bubble at all?

ROBERT SHILLER, PROFESSOR OF ECONOMICS, YALE UNIVERSITY (ENGLISH) SAYING:

Yes. Well, I'm always worried about- this has become a speculative market. There's been a change in our market psychology over the last 50 years. Volatility has just been growing. And people used to just take it for granted. When the time comes, I'll buy a house, and now they're thinking it's- and if you think, and maybe you have to jump in early or get out early. And so that is driving, and especially in cities like Phoenix and Las Vegas, it's driving that kind of sentiment. And that may be reversed. The thing you have to remember is in the longer run, these things, they don't stay up. They go down again.

ANCHOR (OFF-CAM) ENGLISH SAYING:

So the implications of this speculative market then are what? Timing in terms of when people get in and out of the market or are we looking at perhaps setting ourselves up for another collapse in housing prices?

ROBERT SHILLER, PROFESSOR OF ECONOMICS, YALE UNIVERSITY (ENGLISH) SAYING:

Right. Well, right now, someone who is thinking of buying might want to buy now rather than a year from now. On the other hand, the inventory is low. And you might not find the house you want or you're going to live in for years. So you have to balance those things. As far as the longer run thing, I don't know, I don't see a lot of optimism, room for optimism that home prices are going to just go up like they did the last time. I don't think they will. They'll go up somewhat and then likely come back down. So it's, I think basically people should, in making a home-buying decision, should think what do I want, take your time to find what you really want and don't go into it because of some speculative reason

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