The already crumbling housing market could plummet an additional 20%, says Gary Shilling, president of A. Gary Shilling & Co., and author of the popular INSIGHT newsletter. (Video below)
Although housing is already down 25% peak-to-trough based on the latest S&P/Case-Shiller numbers, there’s no near-term bottom in sight, says Shilling, one economist who presciently saw the crash coming.
Excess inventory – nearly a year’s worth supply – is the “mortal enemy” of any recovery in housing, says Shilling, who does not believe the Fed’s efforts to lower mortgage rates will resolve the crisis.
Barring a prolonged period of weaker prices, Shilling believes only radical action – like bulldozing homes or letting immigrants into America to buy homes – can solve the crisis, as detailed here last month.