"We don't think the market is in that bad of shape. It's just not in as good shape as it was two years ago." -- John Karevoli, analyst at DataQuick Information Systems.
Both gentlemen commented for an AP story on the forecast for housing prices this spring. Shiller, as some may recall, titled one of his books "Irrational Exuberance," borrowing from a term used by former Fed Reserve Chairman Alan Greenspan in a speech in 1996 shortly before stock markets around the world plunged.
"Nationally," the AP story said, "19 major metropolitan markets face a greater than 50 percent chance of housing price depreciation in the next two years, up from 11 markets a year ago," according to PMI Mortgage Insurance Company, which publishes regular predictions. As has been the case for some time now, California and northeastern U.S. markets dominate the list, leading us once again to advise that if you have your sites set on a home in the south and you are going to use the value of your home in the northeast to pay for it, waiting for the markets to snap back may be a fool's paradise. The gap in housing values north and south continues to widen.
You can find a list of markets ranked by risk at USA Today. No fooling.