Robert Schiller on Housing.
Mr. Schiller has been warning of the possibilities of a bubble in the housing market, and when a second edition of the aforementioned book was issued in 2005, he updated it with his thoughts on housing. [I highly recommend the book, by the way, despite the fact that it might appear dated, as his insights are timeless.] Today he was interviewed on Bloomberg Radio on his current views on the housing market, which is now showing various signs of stress.
Listening to this interview, it's clear that Mr. Schiller is no Ravi Batra (thankfully!) seeing an economic disaster around every corner. Mr. Schiller instead sounds rather even keeled, and believes modest declines in housing prices over time are more likely than an end of the world scenario. Responding to a question, he downplays what he identifies as the worst case scenarios, a world wide recession or a Japan style deflation, though he does not completely rule them out. He does express his faith that the Fed will do it's best to lead us through this period.
That said, if you read Mr. Schiller's writing on housing, whether in his updated book or in recent articles, you will note that valuations are far enough ahead of long term averages that any adjustment, whether in terms of a quick movement in price or a longer duration change, has the potential to be quite interesting.
Bloomberg Radio: Robert Schiller.
(requires Microsoft Media Player)