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Start Drinking, Prices May Be Heading Sideways

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The New York Times checks in with the latest numbers from the Case Shiller home index, which monitors home sale prices in 20 cities, reporting that prices continued to rise during the summer months (in July, prices rose 1.2 percent from the month before). Via the paper: "Prices increased in 17 of the cities, one more than in June. As recently as March, all had declined. 'There are now several months of data in which we have seen improvement,' said Maureen Maitland, vice president for index services at Standard & Poor’s. 'California in particular seems to be showing sustained improvement.'' Terrific news. But now go read the Wall Street Journal, which has a Q and A with Robert Shiller, the man behind the index. Among other things, Shiller anticipates a recovery that's five years off, with prices staying relatively flat for the next few years, or as he puts it: sideways (ie neither falling or rising). His concerns: The tapering off of home buyer’s tax credit incentives, the phase-out of the Fed's plan to buy mortgage-backed securities, and more anticipated foreclosures. He tells the WSJ: "We’ve yet to see how the housing market will continue. Part of the problem is that people are buying now rather than later. When later comes, there could be a downturn in the market."
· U.S. Home Prices Continue to Improve, Index Shows [NY Times]
· Q&A: Shiller Sees 5 Years of Stagnant Home Prices [WSJ]