Yale economist Robert Shiller worried about stocks in 2000. Now he's worried about real estate.
Q. So far, home buyers have been right in thinking home prices will keep going up.
A. Part of what drives the bubble is this confidence that the market will always go up. When people hear what a house sold for 30 or 40 years ago, they are astonished. But a lot of that is just inflation, not any increase in real value. It is possible that home prices will sag for a long period of time.
snip..
Q. So what should we do?
A. Most people want to live in their homes, so they should stay. But people can make decisions to reduce their home-price exposure. One possibility is to not be as ambitious about the size of your house. If you think that you'll move again in five years, then wait to buy your dream house.
http://money.cnn.com/2005/01/25/real_estate/realestate_shiller2_0502/index.htm
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