The housing market still isn’t rational, economist Robert J. Shiller contends in an opinion piece for The New York Times.
“Home prices have been climbing. They have risen 27 percent nationally since 2012, even more in places like San Francisco,” he writes. “But why worry? If you accept the efficient markets theory — and believe that real estate is an efficient market — then these prices are based on ‘new information,’ even if you don’t know what that information is.”
Shiller also criticizes real estate investors, saying that the reason the housing market is far less rational than “even the often irrational stock market” is because investors “find it difficult to understand how housing supply responds to changes in demand.”