Home Price Declines Likely To Continue

New York, NY, June 8, 2009-- Robert Shiller, the Yale University professor who predicted the collapse of the U.S. housing market, writes in the New York Times that home price declines “may well continue for some time.”

Shiller, co-founder of the S&P/Case Shiller index, said prices may “continue to fall, or stagnate” in 2010 and 2011. The S&P/Case Shiller index of 20 major cities showed median home prices were down 32 percent in March from their peak in July 2006.

Shiller said that U.S. home prices didn’t begin moving up until six years after the end of the prior housing boom in 1990-91. Home prices in Japan fell every year for 15 years after the 1991 bursting of Japan’s real estate bubble.

Shiller writes that most homeowners don’t behave like investors trying to time the market. Decisions to buy or sell homes are more frequently tied to life-style changes or growing pressures of economic necessity, further reason why a buying decision would be delayed at a time when unemployment is at quarter-century highs.