No Housing Bubble?
by Pratik
Prices will probably drop some more but personally I don’t expect to ever again see index values around 110. Do you? If we don’t see the massive drop back to “normal” levels then the run up in prices should be described as a shift to a new equilibrium – much as happened during World War II.
Alex Tabarrok at Marginal Revolution uses the oft-quoted Robert Shiller’s chart on home values and concludes that fundamentally there was no housing bubble.
Update: As expected, Paul Krugman has a response.
[...] views: Institutional Economics, The View From Alexandria, Urban Planning Blog, Paul Krugman, Kevin Drum, Ross Douthat, Megan McCardle (who has a nice discussion of why the past [...]
[...] views: Institutional Economics, The View From Alexandria, Urban Planning Blog, Paul Krugman, Kevin Drum, Ross Douthat, Alex Whalen, The Glittering Eye, Fester, Housing [...]