At this weekend's annual meeting of the American Economic Association (AEA) in New Orleans, a panel of top economists Robert Shiller, Paul Krugman, Larry White and Nouriel Roubini addressed the subprime meltdown. Their consensus calls for property prices to decline 20-30% over the next several years, with 30% most likely, and the odds of a recession at much greater than 50% now. Even the boys at Merrill Lynch, Morgan Stanley and Goldman Sachs are now on the 2008 recession train.
Shiller goes even further and says there is a real possibility of falling into a Japan-style recession where housing prices continue to slump for several years.
These guys are not like the chief monkey economists at the Nat'l Assoc of Realtors and Nat'l Assoc of Home Builders, where the obvious major conflict of interest exists between being a good economist and a good cheerleader. These are top economic prognosticators and professors at Yale, Harvard, etc. Shiller and Roubini were two of the most vocal calling for the subprime and housing fallout several years ago. It is scary to think some of their forecasts could even be conservative. If these guys are correct, 2009 might even be too early to get back into the real estate game, that is if you are fortunate enough to be out of it currently.