Yale Professor … House Price Decline Could Be Worse than Great Depression

In a Yahoo Finance interview with Yale professor and MacroMarkets chief economist Robert Shiller he made some grim housing forecast while promoting his book The Subprime Solution. Three points Shiller made are:

• Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s. With prices already down almost 20%, it's not a stretch to think we might exceed that drop this time around.
• There are about 10 million homeowners whose debt is higher than their home value, which has broad implications for how Americans feel about their wealth and spending habits (read: more pressure on consumer spending).
• The current hopeful consensus — that house prices will bottom soon and then begin to recover — is most likely a dream. Housing markets don't usually have "V-shaped" recoveries. And even if house prices stabilize in nominal terms, after adjusting for inflation, most homeowners will continue to lose money.   
• A few of our prior posts about professor Shiller:

San Diego Home Values Fall 16.7%

Standard & Poor’s Index Shows Home-Price Declines As The Largest on Record

50% Home Price Declines Possible?

National Home Price Index is @ It’s Lowest Point in Its Reported History

Housing Bubble … Investors Opinion

Yale economist Says San Diego Home Values Down 10% From One Year Ago!

Home Prices — Largest Drop in 16 Years!