From the latest issue of business week magazine, Robert Shiller has these several points:

1) Housing price is going through a peaking process, … will have 10% to 30# decline over the next five years.

2) Developers are disguising the price decline by throwing in SUV or granite countertops to hide the actual price drop.

3) He could not find correlation between interest rate and housing boom. High interest rate in the late 70s did not prevent a housing boom.

4) Still strength in the market: NAHB is reporting a higher traffic for prospective buyers. Short term revival is possible because human psychology may make it a self-fulfilling prophesy.

5) What will bring the party to end? Answer: Bubble won’t bust suddenly, it takes time. People’s mind are turning, large supply of homes also will make it happen. He said that when embarrasing stories of buyers appear on many newspapers, it’s pointing to a time that the party is over. In other word, when the buyer stupidity is told and retold, the party is clearly over. He sense that it’s happening now.

6) Was the recent rise in home prices the biggest housing boom in history? Answer: Yes, this is the one that capture the whole country. Not like in the past boom, it only happened to selected regions.

7) What kind of return should homeowner expect?
since 1890 to 1990: 3%
Most of the big gains were made after World War II and since 1998.