Tuesday, October 27, 2009

Shiller Warms About Up Housing Price Data

The gains in U.S. home prices in recent months may not be sustainable and increases in some areas of the country appear to be in "bubble territory," says Robert Shiller, creator of the Case-Shiller Home Price Index, which showed houses prices up rose by 1.2% in August.

Home prices in certain areas, such as Minneapolis and San Francisco, have risen by double-digits over a mere four months, and if viewed on an annualized basis, they look like they are in "bubble territory," Shiller said.

"It is a time of great uncertainty," he said.

I should add that Shiller isn't the only one to notice the spikes in San Francisco and Minneapolis housing prices. Brian Shelley emailed me this morning and said:

What’s striking is the price rise in certain markets, namely San Francisco. In the non-seasonally adjusted numbers San Francisco has had a 12.5% increase in home prices over the last 5 months. Not annualized, actual rise. That’s a 33% annualized rate. You have to go back all the way to the tail end of the dot.com craze (2000) to find a 5 month period where the rise is faster. In Minneapolis it’s over 12% as well.

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