Jim Kingsland at the Kingsland Report says:
It won't be pretty folks. If Goldman and Shilling are right, and historically housing bubbles have always deflated back to about where they started, consumer spending will die out and we'll see a recession by early next year.
Gary Shilling, who I chatted with today for this piece for CNBC and who is quoted below, thinks we will see a recession due to the housing crunch by the end of the year. Good luck folks.
If you think the decline in home prices is bad now, just wait.
Two reports out his week show the once high-flying housing market is quickly losing altitude and that prices are likely to head still lower.
According to the S&P/Case-Shiller Home Price Index released Tuesday, prices fell 3.2% in the second quarter, the sharpest decline since the index was created in 1987. The pace of decline accelerated from 1.6% in the first quarter.
On top of that, the National Association of Realtors reported on Monday that the median price of existing homes eased 0.6% in July, to $228,900.
Both reports portray weakening housing prices, but the declines have been in the single-digits or smaller so far. That may be about to change.
"I think we’re yet to get to the main event," said Gary Shilling, president of A Gary Shilling, a money-management firm. "We continue to look for a 25% decline in median single-family house prices. I think this is really just getting started." MORE
