Robert Shiller was interviewed in CNBC's Squawk Box this morning, and he gave a couple opinions that captured my attention.  Some of what he had to say seemed encouraging to the housing industry, and some was not quite so.  Following are a few perceptions I had of his interview:

Shiller said that he feels that mortgage interest deductibility encourages bigger houses, and he is not sure that is necessarily a positive result.  He suggested that perhaps the deductibility should be preserved only for low income buyers who can barely afford a new home.  I found that comment interesting because there are so few low income buyers of low priced homes who realize any tax benefit from itemizing deductions, with or without a home interest deduction.  Additionally, Professor Shiller may want to consider that the deductibility encourages big loans, not necessarily big homes.

When asked which was better, real estate investment or equity investment, Shiller went with stocks over real estate.  He cited long term trends to support his opinion.  He probably called that one correctly.  Not only is the return comparable or a bit better with the right mix of equities, but they are considerably more liquid as well.  He did say that it makes plenty sense to buy real estate as consumers who are investing in their future use and enjoyment of the property.

One other item Shiller touched on was the home buyer tax credits, which he characterized as useful in temporarily raising the price of homes during their run.  What was advertised as a great benefit to buyers was actually a greater benefit to sellers.  Of course, at the time of the credits, almost all sellers were banks.  Interesting.

 

 

 

E.J. "Mike" Carlier  Lakeville, MN

Keller Williams Preferred Realty 

612-916-3033

http://www.prettygoodhomes.com

 

Home and Garden Show was a waste of my time
04/22/2013
share
One of the local communities has an annual home and garden show every April, and walking through the exhibits is usually an enjoyable way to spend a Saturday afternoon. I can't say that that day was not enjoyable, but I was there on a mission which… more
Should you invest in residential real estate?
04/12/2013
share
There are a lot of folks who feel that the best possible investment right now is single family rental property. Not only are individuals pursuing low cost homes to own and rent out for income, but there are a fair number of corporations doing… more
Does anyone know the average return on investment property?
04/07/2013
share
There are obviously a lot of residential real estate professionals who work with investors. I have helped a few folks who called themselves investors find property to buy. The expectations of investors seem as varied as the property they choose. But… more
Lawrence Yun Ratchetjaws the Same Smack
04/05/2013
share
Thank you, David Saks of Memphis, for this excellent update on the recent non-newsworthy accomplishments of Dr. Yun. Realtors deserve better representation, and our image is challenged by the national jester. Via David Saks, Broker - (The Real… more
Is this the best time for a home move up?
04/05/2013
share
We make a lot of decisions that add to our expenses and detract from our enjoyment derived from them. Buy new tires for the car, and trade it a week or month later. The short time enjoying the new tires cost you $5 to $20 or more a day, and the… more
Are you sure your "Agent" is really your agent?
02/26/2013
share
If you're looking for a home in Minnesota, this state requires certain levels of performance from licensees who are representing their buyer clients. Before performing any acts as your representative, a buyer's broker agreement must be in place… more
Tight Real Estate Market - "Homebuyer Strategies for Success"
02/24/2013
share
Debra Albert, an accomplished real estate professional in Port St. Lucie, Florida, offers some advice for home buyers. This advice applies in virtually all markets regardless of whether fast or slow. With internet access to home listing searches… more
Al Gore must be an investment genius
01/25/2013
share
My morning stock market overview landed on the Yahoo Finance page for Apple. Looking through the data I found that the third highest individual holder of Apple stock is the inventor of the internet himself, Albert Gore Jr. The man must be some kind… more
The evolution of fence sitting
01/18/2013
share
During the period since the housing crash, there have been a lot of folks who were waiting for prices to finish their plummet. They waited and waited. Eventually many got tired of sitting on the fence and made a commitment to upgrading their… more