Robert Shiller Says BUY BUY BUY!!!
Okay, Robert Shiller of the famed Case Shiller Housing Index did not say it like that, he couched his recommendation to buy in MBA terminology as opposed to the Billy May’s school of communication, but the results are pretty much the same in this negative atmosphere.
Here is what Shiller really said:
“Having a good fraction of your portfolio in stocks, not zero, is probably sensible now,” he said. “People should be in real estate as well because that has a chance of rebounding. It has to be about diversification, about spreading risks.”
So when talking to buyers on the fence, this is some great ammunition to help them make a buying decision. And in all reality it is a much better decision than it was to buy in 2006.
Shiller, who helped create the S&P/Case-Shiller home price index, warned in an August 2006 interview that there was a “significant probability” that housing market declines would accelerate and push the U.S. economy into a recession. He said today that an increase in pending home sales in March and February’s drop in properties on the market are “positive” signals for U.S. housing prices. Bloomberg.com.
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{ 5 comments… read them below or add one }
I have followed Dr. Shiller for a long time, and I think you are reading too much into his statements. He has always talked about being a diversified investor. He discusses how it is the best way to manage risk. He has never told anyone to get out of stocks or real estate.
He certainly believes that investors are better positioned now than two years ago, but that is common sense. Prices are lower than 2006 so it is pretty obvious.
Dr. Shiller still discusses the option ARMs that are resetting in 2010 and 2011, which could provide serious headwinds to the housing market.
We should listen closely to this man, he was able to predict some market downturn before it happened. Ben Stein is also pretty dang smart, have a look at what he had to say about the economy years and years before the bust. He warned everyone that we were staking our industry on fake money.
There's a pressing demographic issue that I don't see many addressing. It will put upward pressure on housing demand beginning in the next couple years, and continuing for ten years or more.
The Echo Boomers, born between 1982 and 1995. 80 million of them. That's 3 million more than the Baby Boomers, born between 1946 and 1963.
The youngest of those Echo Boomers are buying homes now. Over the next few years more will start buying. Consider the effect on demand, and home prices.
The recession is slowing them down now; the other issue being that the average age for marriage and first child is climbing. But the sheer numbers of this demographic group – all eventually in pursuit of the American Dream – can't help but blow the lid off the market in the next 3-5 years.
Maybe from now on but still persons fear of losing jobs
I have learned two things about real estate investing in the past 4 years as an observer- Conservative rarely wins as big but never loses as big!