During the housing boom Robert Shiller, co-creator of theCase-Shiller Home Price Index, stood out (and endured taunting) for his pessimistic views on the market. Now he's in good company.
A survey of 111 fellow economists and real estate experts by his firm MacroMarkets found that the outlook for the market "continues to deteriorate," with a surge in expectations for a double-dip in housing prices. Home prices are expected to fall an average of 1.4% in 2011, the firm said Wednesday.
Nearly 50% of economists surveyed expect a double-dip in housing prices this year and not one expert forecasts a recovery in housing prices to the pre-bubble trend in the coming five years.
The expectations from the survey, conducted in the first two weeks of March, are the most pessimistic MacroMarkets has collected so far, the firm said.
"Actual home prices at the national level are now less than 1% away from establishing a new post-crash low," said MacroMarkets, a Madison, N.J., financial technology company that was co-founder by Shiller, who is also the firm' chief economist.
"Persistently weak market fundamentals" such as "high unemployment, supply overhang, an unabated foreclosure crisis, and constrained mortgage credit" led the panel of housing experts to their pessimistic view, Shiller said in a press release. "Now they are expecting only a weak recovery, and even that is not until 2013."
Back in the heady days of 2005, a housing trade group economist branded Shiller a "Chicken Little" for his bearish views.