With the Case-Shiller 20-City index up double-digits for the 4th straight month, Bob Shiller has some choice words for the CNBC interviewers about the 'housing recovery'. "Housing is a market with momentum," he notes, "and right now, the momentum is up;" but he adds that while house prices are 'recovering', he remains much less sanguine about this recent move. But it is once he has explained the potential concerns that may weigh on the housing market that Shiller comes into his own as he explains "none of this is real, the housing market has gotten very speculative."
Housing goes through "big cycles," he chides, noting that California "has gone up and down like a roller-coaster for decades but doesn't get anywhere... that's what these markets have become."
Perfectly summarizing the current situation, Shiller concludes, "for the long-term buyer, the fact that [prices] are going up now doesn't mean anything for where it will when you sell."
Must see clip as Shiller scoffs at the current sentiment, the resurgence of 'flipping', and that the housing market is "driven by irrational exuberance."