"When you start seeing a slowdown, that's a reason to believe it's going to accelerate," is how Bob Shiller responds to a question of the slowing rise in home prices. While Cramer demands we focus attention of the 'earnings' of the homebuilders and what they are saying, Shiller prefers to look at the data.
[But wait... the homebuilders are soaring today but the words don't seem so exuberant:
- *KB HOME SAYS TIGHT UNDERWRITING HURTING DEMAND MORE THAN RATES
- *KB HOME SAYS SOME BUYERS BACKED OUT OF DEALS AFTER RISING RATES
- *LENNAR'S CEO SAYS DEVELOPERS HAVE TROUBLE GETTING CAPITAL
- *LENNAR CEO SAYS LAND CONSTRAINED UNTIL LOW-COST CAPITAL COMES
- *LENNAR DEMAND HAS 'COOLED A LITTLE BIT,' PRESIDENT SAYS
The always pragmatic professor notes he is "not worried about a slowdown" because he is "more worried about bubbles" that appear to be back in the US housing market. "In some cities it's looking bubbly now," Shiller adds, remarking on the fundamental speculative shift in homeownership to the hedge funds on the own-to-rent bandwagon (that we noted last night appears to be coming to an abrupt end for the smarter money).
With the effect of affordability stymied by the speculators cash, he still worries that "we might even start to see weakening [in prices] from now." The biggest drivers of future gains, Shiller adds, are 'recent gains' (which are fading), and employment (which is awfully slow) suggesting "there might be a slowdown ahead."