Nobel Laureate Weighs In On Fears Over Future Home Values

Dated: 11/07/2018

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 Last week St. Cloud homeowners’ peace of mind would have been strengthened by some words that received wide circulation throughout the financial press. Their author was a gentleman whose opinions are as close to bankable as anyone currently on the scene. If there were such a thing as a Nobel Prize in real estate, this guy would own one—come to think of it, he DOES have a Nobel prize (for economics), but his work largely centers on the U.S. real estate market.

We’re talking about Robert Shiller, the Yale professor who co-invented the Case-Shiller Index. It’s the most economically respected measure of U.S home prices. St. Cloud homeowners who measure their own financial wherewithal usually consider the market price of their St. Cloud home as a major contributor to their net worth—the personal financial ultimate bottom line. As Wall Street’s MarketWatch put it, “what’s more natural than wanting to know the value of our biggest assets?

That’s why the trajectory of home values in the months and years ahead are of more than passing interest—and why the views of Professor Shiller make headlines. Among other prescient pronouncements, he foresaw the past decade’s housing crash and subsequent financial meltdown—and penned an article predicting it a full year in advance.

The latest S&P CoreLogic Case-Shiller Home Price Index did report some slowing—but that was a slowing in the rate of price increases, rather than a true slowdown. Still, after years of constantly upbeat statistical news, it’s not surprising that Shiller’s views on what’s next got wide coverage when CNBC interviewed him last week.

What the straight-talking economist had to say was welcome news for St. Cloud homeowners. When the interviewer brought up possible fears of a major downturn in home equity like the previous decade’s housing bubble, Shiller replied, “it’s not the same.” On the contrary, addressing home values in the immediate future, he was definite: “I don’t expect a sharp turn in the housing market.”

Much of the U.S. slowdown in home sales has to do with a lack of inventory: homeowners willing to sell. If you are one of St. Cloud’s homeowners, you can take that as a green light for listing your own property in today’s market. If that’s you, I hope you’ll give me a call!


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Noel Johnson

Passion for investing in real estate brought me to create Premier Real Estate Services in 2002. Ten years of purchasing & managing several rental properties, while assisting friends & clients with bot....

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