Shiller Believes Home Prices Will Drop for Years

U.S. housing prices could continue to fall for years, says Robert J. Shiller, the Yale University finance professor who helped devise the home-price index that bears his name. Shiller wrote in a column in The New York Times that declines in home prices don’t right themselves quickly. As an example, he pointed to the Japanese economy where land prices fell for 15 years after the 1980 housing bubble burst. Shiller’s article commented on an estimate by T2 Partners LLC, a hedge fund, that home prices will likely hit bottom in mid-2010 after dropping 40 percent to 50 percent from their high.

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