Yale’s Shiller: US Could Have Japanese-Style Housing Slump


I like this.


An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

By Julie Crawshaw, Moneynews.com,

Yale economist Robert Shiller says the United States could experience a Japanese-style housing slump that lasts for “years and years.”

“I’m worried that home prices have been declining now for about five years,” Shiller told Yahoo Finance. “There’s a lot of downward momentum,” with year-on-year and even month-on-month declines.

“On a seasonally-adjusted basis, it’s just flat.”

The big question now, says Shiller, is if the market is poised to recover. “I give it a chance that it is,” he says, citing optimistic reports on consumer confidence and positive news on the employment front.
Shiller noted that many young people who might have been first time homebuyers are living with their parents instead of purchasing their own homes, and many others are opting to live in apartments and other rental housing.

Shiller says the shift toward renting and city living could mean “that we will never in our lifetime see a rebound in these prices in the suburbs.”

“If you’re young and you don’t need to buy, just think what kind of nice, new modern high rise apartment building, with all the exciting things built in you might get in the city. Maybe some people are thinking that way.”

“The big thing is that we haven’t resolved Fannie (Mae) and Freddie (Mac), says Shiller. “This inadequate demand you see is only there because of the government.”

Shiller says people sense that the market is becoming more and more political and are holding back. Technology plays a role as well: As we get better and better at making houses, prices go down. “People won’t want the old ones, so prices will decline,” Shiller says.

Investors, Shilling says, will do better to buying shares in a complex of some sort because “dispersed single family homes are a hard business model.”

Reuters reports there’s a growing list of big and small investors who see fat profits to be made in renting out foreclosed homes, especially now the U.S. government is moving ahead with a trial project to sell big pools of single-family homes that Fannie Mae currently owns in some of the hardest-hit housing markets.

A perpetually sluggish housing market, which Shiller believes has become “more and more political,” might push the country in a “Japan-like slump that will go on for years and years.”

Tags: , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *


Subscribe without commenting