Monday, September 10, 2012

Mon Post #2: Robert Shiller, U.S. House Price Guru, Says He's ‘Not Investing In Vancouver Real Estate'

The Huffington Post: British Columbia picked up on US Housing Guru Robert Shiller's invterview on the Business News Network (BNN) last week in which Shiller said "Vancouver’s housing bubble is more extreme today than California’s was a few years ago."

Robert Shiller, co-creator of the Case-Shiller Index, which measures U.S. house prices, told BNN late last week that "Vancouver looks like part of California" when it comes to its housing market.
“Canada didn’t have the crash we had in the U.S. It’s just continuing to grow and it’s accumulating into some big price increases. So it’s looking like the bubble is — or at least has been, until recently — still alive in Canada.”

Shiller displayed a chart showing Vancouver house prices, adjusted for inflation, exceeding growth rates seen in San Francisco at the height of its bubble.
“San Francisco is a bubble city that’s talked about as one of the major boom and bust cities in the U.S. They’re no different in Vancouver, in fact it’s worse in Vancouver.”
The Yale University economist said that “Vancouver is San Francisco, lagging by a few years.”He added: “I have Vancouver doubling (house prices) in 22 years. So that’s even bigger than San Francisco['s bubble]. I’ll tell you one thing, I’m not investing in Vancouver real estate.”

Of course those that live her in the Village on the Edge of Denial see things differently.

Local economists like Tsur Sommerville argue the slowdown does not mean the market was ever in a bubble. Said Somerville, director of UBC’s Centre for Urban Economics, the Vancouver market hasn’t had the kind of irrational exuberance that bubble market exhibit.

“You can’t burst a bubble that wasn’t there.”

Denial is such a wonderful thing.


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  1. It's amazing that Sommerville actually gets paid money to say the things he says.

    1. I don't blame him for taking money under the table. It's not like UBC stipends are in any way commensurate with with Vancouver's cost of living.

  2. Let's assume it is not bubble as Tsur Somerville is asserting. It seems like people have sensitivity to the word 'bubble', but the prices will come down 10%, on average, year over year for a few years.

    I don't know who to believe Tsur Somerville, or Robert Shiller! Before Dr. Somerville shows up I didn't even know Real Estate has a tenure in university. It sounds like 'bicycle tire engineering' professor, or 'elephant foot biologist'.