If you want to get an idea about what way the housing market will play out in the coming years, you would be well advised to pay attention to the words of Robert J Shiller. Shiller is the author of ‘Irrational Exuberance‘, a book which correctly noted a stock market bubble in 2000. He is also known for noting an alarming overexpansion of property values during the mid-2000s, co-creating the Case-Shiller Index of home prices, and being a Professor of Economics at Yale University.
So what does Prof Shiller reckon will happen to house prices over the next 10 years? Overall, he thinks they will remain fairly stable. But he also notes that there will be increased demand for renting and walkable housing. As the linked article notes:
“Shiller says people don’t want to commute long distances because of relatively high gasoline prices and in the current “ideas economy,” many want to live in close proximity to others. There are also demographic shifts: aging baby boomers who no longer enjoy working on the upkeep of their homes and the increase in single-person households.”
Shiller’s remarks match comments from local realtors that note the desirability of walkable homes. It also corresponds to Princeton rental rates, which are very high, reflecting pent-up demand in the rental market. In planning future development in the Princeton area, we would do well to keep this in mind. Although our zoning is focused towards large-lot, single family homes that often require cars to get around, it is walkable housing and renting that is going to be driving demand over the coming decades.