Last week Greenwich homeowners’ peace of mind would have been strengthened by some words that received wide circulation throughout the financial press. The author was a gentleman whose opinions are as close to bankable as anyone currently on the scene. If there were such a thing as a Nobel Prize in real estate, this guy would own one—come to think of it, he DOES have a Nobel prize (for economics), but he focuses his time now on the real estate market.
I’m talking about Robert Shiller, the Yale professor who co-invented the Case-Shiller Index. It’s the most economically respected measure of U.S home prices. Homeowners who measure their own financial wherewithal usually consider the market price of their home as a major contributor to their net worth—the personal financial ultimate bottom line. Certainly those in Greenwich and other luxury markets do. As Wall Street’s MarketWatch put it, “what’s more natural than wanting to know the value of our biggest assets?”
That’s why the trajectory of home values in the months and years ahead are of more than passing interest—and why the views of Professor Shiller make headlines. Among other prescient pronouncements, he foresaw the past decade’s housing crash and subsequent financial meltdown—and penned an article predicting it a full year in advance.
The latest S&P CoreLogic Case-Shiller Home Price Index did report some slowing—but that was a slowing in the rate of price increases, rather than a true slowdown. Still, after years of constantly upbeat statistical news, it’s not surprising that Shiller’s views on what’s next got wide coverage when CNBC interviewed him last week. What the straight-talking economist had to say was welcome news for homeowners. When the interviewer brought up possible fears of a major downturn in home equity like the previous decade’s housing bubble, Shiller replied, “it’s not the same.” On the contrary, addressing home values in the immediate future, he was definite: “I don’t expect a sharp turn in the housing market.”
Much of the U.S. slowdown in home sales has to do with a lack of inventory in some markets: homeowners not willing to sell. In other markets, like Greenwich, it is not having the kind of homes that buyers are seeking. Being in sync with design trends and architectural style preferences along with pricing for the current market are key elements in achieving a sale.