Sunday, August 27, 2006

More Shiller

Get ready for more Robert Shiller, the Yale economist who called the tech bubble, coining the Greenspan-adopted term "irrational exuberance" along the way. Shiller has been doing some nice work on historical real estate prices, finding inflation-adjusted appreciation to be quite modest over the last century. This is violently against the conventional wisdom, but then what does the madding crowd know about calculating real returns?

See this Times piece on the latest prognostication about how our housing bubble is going to end.

Earlier related posts here and here. The second link has a nice figure comparing our bubble to the Japan real estate bubble of the 80's. You can see we could easily give back half the recent gains over, say, the next 10 years.


1 comment:

Dave Bacon said...

Wow, look at WWII and when the increases "stuck." Funny I never remember my grandparents complaining about house prices. I wonder if, however, my great grandparents would have had a different perspective?

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