Calculated Risk’s Bill McBride points us to a new interview with Robert Shiller, the legendary Yale economist who famously predicted the dotcom and housing bubbles.
Speaking to NPR’s Neal Conan earlier this week about housing prices, Shiller continues to be reluctant about calling a bottom in U.S. home prices. However, he suggests when it may be appropriate to say that the housing bottom really is in place.
Here’s part of the transcript of the interview:
CONAN: And in the spring you were on the fence as those first reports came in giving three months of generally positive data. Do you think we’re coming off the bottom?
SHILLER: Well, we definitely have positive data. The question is how strong is it, and will this fizzle – this rally fizzle or not? And I don’t know the answer to that. But I point out that this is the fourth time we’ve had a rally since the crisis ended. It’s coming in the summertime, right? Well, that’s the normal time of strength in the market.
So if you look at the data, it doesn’t jump out at you that we’ve reached the turning point. Now, we may have, but I think that seasonality seems to be getting stronger, and that’s another contender.
CONAN: So how long do you think you would want to wait before you saw enough numbers to make a decision?
SHILLER: Well, I used to forecast home prices, and I thought a year – once you have a year – this is what I used to think, and whether it’s still true, but…
SHILLER: But once you have a year of solid price increases, you are probably off to the races for some years. So yeah, but we’re not into it that long yet.
Read more at NPR.org.