Shilling: House Prices Will Drop…A Lot

An Illusion. It's as simple as that.

Inquiring minds are reading about Gary Shilling and him updating his October prediction that house prices would fall another 20%. In the two months since that prediction, house prices have once again started to slide.

Below, Mr. Shilling outlines his ideas on the recent drops are just the beginning:

Last spring, many believed that not only was the housing collapse over but that a robust rebound was underway. Investors were crowding into foreclosed house sales and bidding up prices in California, often the bellwether state for new trends. The tax credit of up to $8,000 for new homebuyers that expired in April spurred buyers and promised to kick-start housing activity nationwide. TheHomeAffordable Modification Program was trumpeted by the Administration to help 3 million to 4 million homeowners with underwater mortgages by paying lenders to reduce monthly payments to manageable size and then paying homeowners to continue to make those payments.

But then a funny—or not so funny—thing happened on the way to housing recovery…

Please click on this link to see: Mr. Shilling’s presentation.

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