The Next Leg Down in Housing

I guess we shouldn’t be surprised about what economists think regarding residential Real Estate. After all, most of the profession missed the housing boom & bust in real time. Too many of the dismal set are still wed to the incorrect idea that we had a housing bubble when the evidence is overwhelming that we had a credit bubble. They misunderstood the impact of the housing boom & bust on the economy, and completely missed the the impact of subprime lending.

Based on that, I do not what to make of the latest, belated downturn in RE expectations by economists. 56% of the 106 economists and analysts surveyed expect home prices to decline this year. That’s up from 40% a month ago. (Data from Professor Robert Shiller’s monthly housing survey, of which I am a participant).

I’ll have more on this tomorrow morning . . . for now, New Home Sales are due momentarily. . .

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