From Globe and Mail:
U.S. real estate crash could cause global ripples
The United States real estate market has entered a period of “unprecedented volatility,” and banks, insurance providers, and government housing agencies should brace for global ripple effects, Yale economist and author Robert Shiller told a conference yesterday.
“There is a serious risk of worldwide recession coming up in the next couple of years because of the turning of the real estate market,” said Mr. Shiller, speaking at the annual congress of the International Union for Housing Finance (IUHF) in Vancouver.
“And housing finance people should be thinking creatively now about what to do about this,” Mr. Shiller added.
While some pundits for years have been warning that global real estate prices have been rising too high, too quickly, fears of a bubble proved largely overblown in cities such as London and Sydney over the past couple of years.
But with prices falling and homes taking longer to sell, the U.S. is the country that shows the most signs of being at a turning point, he said.