Shilling: Housing Market Could Fall Another 20 Percent

Instead of moving to China, do not purchase products made in China, where would the jobs go then? Now that gas prices have come down, what happen to the bandwagon of finding alternate means? The day after 911 almost every vehicle, house and business flew the american flag, where are the flags now? So the banks are not lending.....what would happen if every account holder at BOA pulled there money out in protest? It would require a radical act such as this to get them to start lending again, if not let them sink. Then move on to the next largest bank and do the same, we need another tea party type movement to send a message to the Feds.

I foresee an absolute collapse in real estate in NYC.

Yeah, right Henry,"The Government", will "buy up" all the "toxic mortgages".A Stimulus Package of What and by WHOM? AND WITH WHAT MONEY?? THE TAXPAYERS MONEY?...The Taxpayer is Broke!! The GOVY Gravy Train has rode this rail over the Cliff. TAX CORPORATIONS?... and they pass the "TAX-COST" ON to the consumers, again, the taxpayer! ALL Governments,FED,STATE,COUNTY,CITY, has got to quite spending and start CUTTING, Income Taxes, Sales Taxes,Property Taxes, Fees,Licenses,ETC. ETC.Our Economy "IS OUT OF BALANCE" Government has "Free Healthcare","Subsidized Housing","Early Retirement Lifetime Pensions and Healthcare"....what does the Non-Government employees Have? Dnt.Hv.SHT!! Just More Taxes.

The real estate boom was made possible by America borrowing 2 to 3 billion dollars a day from overseas. Common sense tells you that this was not sustainable. And, not if but when these nations stop lending to America, the sh** will hit the fan. Bye, bye real estate. Ten cents in the dollar for your home.

I am a renter. I like home prices to fall 25% so that I can buy one. Presently I cannot afford it. Many homeowners would also buy a bigger house if home prices fall another 25%. Even if home prices fall 50%, the mortgage's monthly payment is FIXED. So the homeowner's monthly costs have NOT increased. I don't see any problem - falling home prices is good for the renters.

Gary Schilling is the new Dr.Doom

Well the excess inventories will come down to equilibrium with time is goint to be sometime before we call it the end of the bubble.

No recovery yet. In CA, the housing inventory is 3 times the 2002 & 2003 inventories when hi-tech downturn hit bayarea. The median prices are still higher than the avg 4-6 times median income. Therefore, prices need to go down to here average buyer can afford. Also, qualifying for loan is no longer possible for many buyers with undocumented (tax evasion) earnings and not able to afford as there are no longer mortgage lenders (Countrywide, IndyMac, etc) who offer teaser-rates. This was a historic housing bubble, and it will take long time to clear and recover. Moreover, 68 million houses owned 70 million baby-boomers are now ready to retire and their houses will coming to add to housing inventory.

In the SF Bay Area the Med Price was 200K in 1997 then it skyrocketed past 750K... It will take more than 50% to get back to normal price to income ratios. The past bubbles were nothing like what we saw today. I wonder why no one is investigating the realtors for all the nonsense and fraud they commited.

Actually Y!User.. the decline is the recovery!

I sure do love turbulent markrts - every idiot who's made a million wrong predictions over the course of time makes one that hits. Then they want you to believe their next prediction is bassed on strong track record. One right out of a million wrongs aren't odds I'll bet with.

Not many shows will take this Schilling clown hence why he keeps coming back to this gig. Look at history - a fall like 2008's has never been followed by a fall like the one he is predicting. Is it possible? Yes. Is it probable? Not even close. I know, I know - this time's different, right? Isn't that what we said in the tech bubble? And in S&L crisis? And in 1987? And in the 70's? You get my drift. THIS ISN'T DIFFERENT THIS TIME!!

Another 20% would be a mediun home price of around 150K. The yearly interest is will be less than that of renting. Using the 25% of gross income you get about 40K to buy the medium home. The medium income is 48K. We have almost never had a situation were the medium income could afford the medium home because they are not the same thing. The medium home is homes for the top 70-80% while the medium income includes all 100%. I calculated based upon historic data of medium income vs medium hous payment (that years interest rate assuming 10% down) and came up with a price of 185K. For every 10% drop millions of renters will be pushed into the market. catinabank is correct about the real problem.

Anyone that thinks we have hit the bottomis clueless about economics. There is absolutely no catalyst in sight to stop the falling real estate prices. 1 - A huge supply (really, really huge) and almost no demand - pices fall. 2 - While interest rates are low, credit is severly tight. You need a 780 FICO score and 20% downpayment to even be considered. There are some people that fit that, but very, very few. People that do qualify, see prices falling faster and faster. Why buy now? That is just foolish. The most basic financial rule is NEVER pay intest (use leverage) to but an asset that is falling in value. The only way to hit bottom is to have prices fall dramatically further, tot he point that a house is affordable in the current economic circumstances (we have a long way to go baby). Or alternatively, the banks need to dramatically relax the lending standards again, so people can buy and increase demand. But that is what got us into the problem in the first place.

Anyone that thinks we have hit the bottomis clueless about economics. There is absolutely no catalyst in sight to stop the falling real estate prices. 1 - A huge supply (really, really huge) and almost no demand - pices fall. 2 - While interest rates are low, credit is severly tight. You need a 780 FICO score and 20% downpayment to even be considered. There are some people that fit that, but very, very few. People that do qualify, see prices falling faster and faster. Why buy now? That is just foolish. The most basic financial rule is NEVER pay intest (use leverage) to but an asset that is falling in value. The only way to hit bottom is to have prices fall dramatically further, tot he point that a house is affordable in the current economic circumstances (we have a long way to go baby). Or alternatively, the banks need to dramatically relax the lending standards again, so people can buy and increase demand. But that is what got us into the problem in the first place.

Anyone that thinks we have hit the bottomis clueless about economics. There is absolutely no catalyst in sight to stop the falling real estate prices. 1 - A huge supply (really, really huge) and almost no demand - pices fall. 2 - While interest rates are low, credit is severly tight. You need a 780 FICO score and 20% downpayment to even be considered. There are some people that fit that, but very, very few. People that do qualify, see prices falling faster and faster. Why buy now? That is just foolish. The most basic financial rule is NEVER pay intest (use leverage) to but an asset that is falling in value. The only way to hit bottom is to have prices fall dramatically further, tot he point that a house is affordable in the current economic circumstances (we have a long way to go baby). Or alternatively, the banks need to dramatically relax the lending standards again, so people can buy and increase demand. But that is what got us into the problem in the first place.

If you want to but a home here in CA, good luck. Just for a mediocre home you need a family income of at least 106K. Even then, the banks are making it harder to qualify. So even if the market drops another 20% here, it doesn't mean squat. This country has too much red-tape with just about everything from tax forms to bank loans. Just wish it was alot simpler, sheesh!.

AFAIK, robert schiller testified at congress in 2005-2006, housing price was 70% over-priced. then about 1 year later, he said it was 50% over-priced. it's been only 1 and half year of decline. it would be foolish to believe it can bounce back from now. if you're going to buy, make sure you can weather 20-25% further down side...

I don't care the housing price. I love my house which I bought for $1.1M and went up to $2.2M and back down to $1.8M. I intend to live in and pass to my kid. I won't sell it if either goes up to $10M or down to $1.

Let's bulldoze Shilling's house.