Home Prices Could Drop For “Another 20 Years” Warns One Economist

How likely are we to fall into yet another recession?  Prospects are looking pretty bad, with a new report showing that housing prices are not only falling, but may continue to fall for as long as two more decades.

Via CNBC.com:

“My gut feeling is we might see a continuation of the decline” in home prices, [Robert Shiller, co-founder of the S&P/Case-Shiller home price index] said earlier Thursday at a Standard & Poor’s housing summit.

He added that a 10 percent to 25 percent slump in real home prices “wouldn’t surprise me at all,” though he cautioned that was not a forecast.

Shiller pointed to the glut of unsold homes on the market and the large amount of homeowners under water on their mortgages as pressuring prices.

As for when home prices might bottom, Shiller told Insider that was unclear and it was possible prices could slide for 20 years.

“We’ve seen five years of decline already since the peak in 2006 and I don’t see evidence that we’re coming out of it,” he said.

For those of us who bought our first homes in the heyday of the housing bubble, that could mean a very high likelihood that we literally will be three or less years away from paying off the entirety of our mortgages before we ever hit that magic “break even” point on our homes where it may become possible to sell again.

This news, coupled with job gains being stagnant, states cutting unemployment benefits, and Republicans refusing to raise the debt ceiling without serious cuts to the social safety net programs, all point to some pretty grim years ahead for the American economy.

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79 comments

Eric Lees
Eric Lees4 years ago

@Brian P
"As far as Obamas record goes, he has done more good for the nation in 2 years than Shrub ever did (much of it is just conveniently overlooked by CONservatives)...he could do a lot more to benefit the country if other politicians would set aside their self serving politics and engage with a spirit of cooperation."

Name one good thing he has accomplished?
2 Bush wars are still going on, now we have a 3rd war which Obama says is not really a war because those are bombs of peace.
Patriot Act is still walking on our liberty.
Debt has skyrocketed
The FED is still screwing things up

Both Corporate parties are to blame. Divide and conquer!

Lynn C.
Lynn C.4 years ago

Thank you for the green star, Shelley.

Ernie Miller
william Miller4 years ago

The blame goes to every politician that has been office during the last 20 years! This is not a party crisis it is a Governmental crises. They all have failed to do their job and they are refusing to do their job right now. How many of you would still have a job if you had a deadline and did not complete the work until 2 weeks past that deadline? That is what happened with the last budget and it is flakey at best with no real substance. And now they are doing it again with the debt ceiling. They spend all their time worried about campaigning or some other politician’s scandals. We are Spending 3 trillion a week in Afghanistan a corrupt government getting the benefit of being propped up with the blood of our children why we kick their grandparents over Medicare? Come on wake up people this is about a corrupt government only doing what their corporate overloads tell them to do.

Deborah N.
Deborah N.4 years ago

People You should know that "Ragonomics" was nothing more than a planned DEPRESION. This was due to the fact that he made a lot of money making movies so people could escape their desperation. There are not things like this now of course they make movies to make money. Back then the Government paid them to make them for escape.
We are going into another depression because it has become an out of control train now.

Lynn C.
Lynn C.4 years ago

This will probably be one of the lesser of our worries in the next few years. When we run out of clean water and drought and floods, storms and freezes destroy crops, a place to live may be moot.

john hall
john hall4 years ago

i wish you folks would stop blaming one side or the other there both to blame for whats going on .

Brian P.
.4 years ago

Lots of people bitching about Obama on this site (like the troll known as Past Member) seem to miss the fact that the writing was on the wall a long time ago that the Bush era financial mismanagement (heralded by Reaganomics) and deregulated banksters and the privately held Fed were leading the country toward financial disaster.

As far as Obamas record goes, he has done more good for the nation in 2 years than Shrub ever did (much of it is just conveniently overlooked by CONservatives)...he could do a lot more to benefit the country if other politicians would set aside their self serving politics and engage with a spirit of cooperation. Obama is not perfect by any means but he's smarter than 99% of repugs and I think he cares more about people than the regressive right.

Vicki T.
Vicki T.4 years ago

home prices are too high and rental prices are too high. realtors and greedy developers develop high prices and the banks....they need to go down.you think...we are in a recession. i know people and places where rent and bus fare went up just as people were losing their jobs...

Helen Allard
Helen A.4 years ago

How can you fall into another recession when you are already in one...too funny. The things that they will do to try to make you mad as hell on here.

Past Member
Past Member 4 years ago

judi w have you tried to rent your mom's place?

or do a lease with option to buy, with stated sales price, stated downpayment stated monthly rent and how much of the rent payment will go towards the downpayment...once they have accumulated the downpayment, the renter applies for a loan. In the meantime you have the rent coming in for the maintenance, taxes and insurance.