In the wake of the biggest housing bust ever, it’s hard to imagine that we would be walking right back into a housing bubble.
But that’s just the nature of bubbles: you don’t know if you’re in one until after the fact.
Robert Shiller, the economist who famously predicted the dotcom and housing bubbles, was on Fox Business News discussing the Case-Shiller home price index, which recently rose faster than expected.
“I think it’s possible this is the bottom, but I’m not at all confident,” said Shiller regarding the housing market.
“The real question in my mind is, ‘Are we possibly off to the races again?'” he said. “I think in cities like Phoenix and San Francisco, we might be seeing something pretty big developing. People there are very speculative-minded.”
Taken aback, the anchor asked, “Are you saying there’s another bubble forming in some areas?”
“There could be. These things take you by surprise. Bubbles occur in the least optimal time. That’s because people think that you want to buy before the news right? So in the midst of a recession you could start a bubble.”
Later in the interview, Shiller reiterated that Phoenix and San Francisco were “notable” in their bubble-like characteristics.
Watch the whole interview: