Robert Shiller

Yale economist Robert Shiller, author of the recent The Subprime Solution: How Today's Global Financial Crisis Happened and What to Do About It and the now immortal Irrational Exuberance, praises Suze Orman in a Wall Street Journal op-ed this morning. The relentlessly sunny Ms. Orman, like only a few other financial gurus, warned people of the current calamity should they not be careful about their property investments.

She was not the first to warn of the housing crisis. In fact, in her 2005 book, published at the height of the housing boom, she says "a home is flat-out the best big-ticket purchase you will ever make" and she gives no warning of the housing debacle we have since observed. But to give credit where it is due, she did warn in that book that adjustable rate mortgages "can become a nightmare soon after" when rates reset upwards. She warned readers not to accept lenders' judgments about how much is OK to borrow. Moreover, she provided detailed advice about the total cost of owning a home with advice to "set your own budget."

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There's a review of Yale economist Robert Shiller's latest book, The Subprime Solution, in The Observer's print edition this week:

The over-valuation of real estate was brought on, he argues, by a “contagion” of bad thinking: Americans as a whole became convinced that real estate fundamentals such as personal income, the cost of building materials and the ratio of home values to rent no longer mattered. Repeated endlessly, the “real estate myth” of homes as an asset destined to appreciate indefinitely due to economic growth, scarce land and a swelling population became a truism, even though it was wrong—as we’re all finding out now.

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New York was a very different place two years ago, and Robert Toll, chief executive of massive luxury homebuilder Toll Brothers, was a cockier man. "Shiller is predicting the mountain goes into the sea," he said about Yale economics professor Robert Shiller, who had been warning that the real estate boom was a dangerous bubble. "He's selling himself."

What's happened since then?  read more »

Location: You’ve been warning of a national real estate collapse since 2005. Do you feel vindicated by last year’s downturn?

Mr. Shiller: Well, I don’t like to use the word vindicated, but it is unraveling as more or less I expected.  read more »

With everyone's attention diverted to plans for stadiums and symbolic spires, Charles Bagli reports that there's been plenty of development happening over on the East Side of Manhattan.

The Daily News provides both an article and an editorial about "museums of conscience" putting in their two cents concerning the proposed International Freedom Center. Not surprisingly, firefighters, families, and editorial writers are miffed.

The New York Times "City" section aims to please all the Francophile High Line enthusiasts. As a result of this article, we imagine that Chelsea's elevated garden will henceforth be known as the "Freedom Line."

Billionaire Ronald Perelman's daughter has big renovation plans for her recent townhouse purchase on the much-desired Macdougal-Sullivan Garden, which she now shares with the likes of Anna Wintour. Also, actress Linda Lavin says farewell to Central Park West.

In 2000, Yale economist Robert J. Shiller predicted the stock market crash with his book, Irrational Exuberance. By mining housing data from 16th-century Amsterdam (see above), Mr. Shiller attempts to prove both that there is real-estate bubble, and it will surely burst sometime soon.

The New York Times offers a cautionary tale that everyone can relate to: When looking for that perfect $2,600 rental, beware of the bully broker.  read more »

Finally, in Manhattan's very competitive luxury condo market, no building is complete without its own "moon garden consultant." -Michael Calderone

George W.  read more »