Shiller Sees Possible Housing Bubble in Phoenix

[Potential_Landlord]

Originally Posted by actinic

Robert Shiller Questions Whether Housing Has Bottomed, Sees Possible Bubbles « naked capitalism

I'm sure no one disagrees.

You may begin.

Beware of the "permas", whether bears or bulls. Mr. Shiller has been bearsih on everything all the time and like a broken clock eventually gets it right. However, if you look at the basic fundamental "affordability" in the Phoenix RE market, then you have to conclude we are at the bottomest bottom in decades rather than any kind of bubble. If anything then we are seriously undervalued. Eventually there will be a bubble again, but nothing is in sight. There is an additional fallacy about this, what I call the "deja-vu fallacy". In our human brain we always assume what happened before will happen again. The RE market recently led us into a crash and recession, so it will do it again. Likewise, the 2003-2007 stock recovery would have to be lead by tech stocks because they lead the 1990s expansion. However, no sector bubbles or crashes twice in a row - the object of speculation always changes as too many people got burned by it before and the memory is too recent.

[jimj]

Originally Posted by S. Chris Webb

"I hope it will be easy to sell my hose this winter."

As long as you aren't asking too much, it should be easy. There are lots of people wanting a good second hose. Be sure to get all the kinks out first, so it shows nice.

Freudian slip???

[Captain Bill]

Originally Posted by S. Chris Webb

"I hope it will be easy to sell my hose this winter."

As long as you aren't asking too much, it should be easy. There are lots of people wanting a good second hose. Be sure to get all the kinks out first, so it shows nice.

Sounds kinky to me

[john3232]

Originally Posted by Captain Bill

I disagree that Phoenix is showing signs of a bubble. The Schiller report is months old and is only reflecting the sales and price activity prior to our normal summer slow down.

The fact that beginning around June our inventory increased, prices for the most part leveled off, and sales slowed, is in my opinion, indicative of normal market reaction.

If prices had kept increasing as dramatic as they were, then yes, we could be showing signs of a bubble.

When the next Schiller report comes out, it will reflect the slow down in Phoenix for the summer.

Right. The Phx market has slowed and the next Schiller report will point to this.

Prices where I've been looking have tapered off at least for now.

Originally Posted by Ponderosa

And the press and the Phoenix bashers will promptly label it as the coming of a new housing collapse.

No doubt.

I tried explaining to a co-worker in early 2011 that it was a good time to start looking. However, he is a fan of Phx housing blogs and the prevailing attitude is often one of continued pessimism.

[Potential_Landlord]

Originally Posted by john3232

I tried explaining to a co-worker in early 2011 that it was a good time to start looking. However, he is a fan of Phx housing blogs and the prevailing attitude is often one of continued pessimism.

Never underestimate the willingness of people to follow somebody and be sheep. Remember Abby Joseph Cohen? When she was the perma-bull in the 1990s she became the guru du jour. That was the time of uber-bullishness. Now people follow the perma-bear gurus du jour like Shilling.

In my opinion Shilling is now well under way to make as much a clown of himself as Abby did back in the 1990s. He declares the US in a recession now:

Shilling: New recession has begun - MarketWatch

[jimj]

Originally Posted by Potential_Landlord

Never underestimate the willingness of people to follow somebody and be sheep. Remember Abby Joseph Cohen? When she was the perma-bull in the 1990s she became the guru du jour. That was the time of uber-bullishness. Now people follow the perma-bear gurus du jour like Shilling.

In my opinion Shilling is now well under way to make as much a clown of himself as Abby did back in the 1990s. He declares the US in a recession now:

Shilling: New recession has begun - MarketWatch

Many people (at least the one's I hear from) think the recession never really ended, just the stats were massaged and some of the key data was dropped from consideration to make it "look" better.

[Potential_Landlord]

Originally Posted by jimj

Many people (at least the one's I hear from) think the recession never really ended, just the stats were massaged and some of the key data was dropped from consideration to make it "look" better.

I hear you and I feel the same when just looking at my salary-income. Wages are still falling in real terms and 90+% of the US population depend on wages as their only or main source of income. For Main Street, the income recession never ended. On the other hand, if I look at my investment income since 2009 it skyrocketed (401k, brokerage account, even my house now as per a recent appraisal). If I had more capital like the 1%, life would be just great. Hence my urgent call for redistribution of income towards consumers to rebalance supply (rich) and demand (consumers) to finally get a balanced economic expansion from which all income groups profit equally (see 1950s-1960s).

[ShampooBanana]

Originally Posted by john3232

Right. The Phx market has slowed and the next Schiller report will point to this.

Prices where I've been looking have tapered off at least for now.




No doubt.

I tried explaining to a co-worker in early 2011 that it was a good time to start looking. However, he is a fan of Phx housing blogs and the prevailing attitude is often one of continued pessimism.

If you want a clear, accurate, and in-depth look at where the Phoenix housing market is now, then read this: http://wpcarey.asu.edu/finance/real-...port201207.pdf

Yes, you were right to tell your friend that 2011 was the time to buy. Coulda made 30% on his investment!

[jimj]

Originally Posted by ShampooBanana

If you want a clear, accurate, and in-depth look at where the Phoenix housing market is now, then read this: http://wpcarey.asu.edu/finance/real-...port201207.pdf

Yes, you were right to tell your friend that 2011 was the time to buy. Coulda made 30% on his investment!

Totally depending on where one bought in/around Phoenix.