Get ready for another housing downturn?
OK, I really hope not.
But for anyone who thinks we are out the woods yet, I suggest listening to Robert Shiller dissect the latest housing numbers.
Interviewed by The Wall Street Journal after the release of the latest Case-Shiller report, Shiller the renowned Yale economist and co-founder of the index, was far from brimming with optimism.
Yes, while stressing at one point that everything may turn out alright in the end, Shiller said a "double dip" housing downturn is at least a possibility as he looks ahead into 2010.
"Double dips in history are rare, but this is one time I worry about that," Shiller tells a couple Journal editors in an interview posted on the newspaper's website.
Shiller's comments came after the latest Case-Shiller numbers showed a significant slowing in what had seemed over the summer to be a budding housing market recovery.
The numbers, according to Shiller, fit a "roller coaster" pattern that is clearly raising some concerns with one of the nation's leading housing market experts.
He noted that concerns there could be a 5 to 10 percent drop in prices in the spring selling season is not out of the question, though he stopped short of forecasting this himself.
Of specific concern is a huge shadow inventory of foreclosed homes that banks and investors are likely to dump on the market, a stubbornly high unemployment rate, and plans by the federal government to start pulling back some of its support for the housing market.
"There is a huge shadow inventory," he noted.
While confidence among consumers and home buyers has been on the rebound, it is fragile still after a "Depression scare" and could take a hit as the federal government starts to scale back housing market subsidies, Shiller contends.
"When confidence comes down, this still could spiral downward," he said.
Now that's a sobering outlook for 2010.
