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Are we in a housing bubble?

Summary:
Chapter 9 tells us that, in the long run, we should be indifferent between renting and owning.  The above plots the price of a housing relative to the price of renting.  Currently its is about 40% higher.  I suspect Shiller would say we are in a bubble.  Here is a piece I found on the web:'It would suggest declining home prices in the near future,' Shiller, who teaches at Yale University, told Bloomberg Television on Thursday. 'I wouldn't be at all surprised if house prices started falling.'

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Are we in a housing bubble?
Chapter 9 tells us that, in the long run, we should be indifferent between renting and owning.  The above plots the price of a housing relative to the price of renting.  Currently its is about 40% higher.  I suspect Shiller would say we are in a bubble.  Here is a piece I found on the web:

'It would suggest declining home prices in the near future,' Shiller, who teaches at Yale University, told Bloomberg Television on Thursday. 'I wouldn't be at all surprised if house prices started falling.'



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