DONT, I REPEAT, DONT ANYHOW INVEST IN PROPERTY! From the Nobel Economics Laureate Robert Shiller says not to go around buying houses. Read this before we shut this site. (This professor has done most in predicting bubbles including the 2008 Lehman crisis and followed by all major banks and funds). Robert Shillers Devastating Takedown Of Housing As An Investment Will Have You Renting For The Rest Of Your Life SAM RO OCT. 14, 2013, 5:29 PM 12,976 45 Nobel Prize Winner Robert Shiller Is Responsible For The 2 Most Important Charts Of The Last Two Decades CHART OF THE DAY: Heres The Perfectly Timed Quote When Robert Shiller Predicted The Housing Bubble JEREMY SIEGEL: Robert Shillers Famous Stock Market Valuation Ratio Has A Big Bias Yale professor Robert Shiller won the Nobel Prize in Economics this morning. Among other things, Shiller correctly predicted the U.S. housing bubble when no one else would. With prices still off of their all-time highs, many cant help but ask the brilliant Professor if nows the time to invest in housing. And for years, he has responded with more or less the same answer: housing is not a great investment. This was an idea that he pushed in his must-read book, Irrational Exuberance. Here are quotes from one particularly memorable exchange with Bloombergs Trish Regan, when Shiller dismantles the idea of investing in a home: Trish Regan: Then why buy a home? People trap their savings in a home. Theyre running an opportunity cost of not having that money liquid to earn a better return in the market. Why do it? Robert Shiller: Absolutely! Housing traditionally is not viewed as a great investment. It takes maintenance, it depreciates, it goes out of style. All of those are problems. And theres technical progress in housing. So, new ones are better... So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000s. And I dont expect it to come back. Not with the same force. So people might just decide, Yeah, Ill diversify my portfolio. Ill live in a rental. That is a very sensible thing for many people to do. If you think investing in housing is such a great idea, why not invest in cars? Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people wont want our cars. Its the same with our houses. So, theyre not really an investment vehicle. Homeowners understand that you cant sell a home with 30-year-old roofing, carpet, and kitchen appliances. Sure, the home price might go up, but investors must adjust prices for years of maintenance and renovations. Read more: businessinsider/nobel-prize-robert-shiller-housing-not-great-investment-2013-10#ixzz2hkWeQjH5
Posted on: Tue, 15 Oct 2013 01:24:57 +0000
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