Kass: A House Divided Against Itself

NEW YORK (Real Money) --

We're beginning to hear noises that we've reached a major turning point in the housing market -- and that, with interest rates so low, this is a rare opportunity to buy. But are such observations on target?

It would be comforting if they were. Yet the unfortunate truth is that the tea leaves don't clearly suggest any particular path for prices, either up or down....

The bottom line for potential home buyers or sellers is probably this: Don't do anything dramatic or difficult. There is too much uncertainty to justify any aggressive speculative moves right now. If you have personal reasons for getting into or out of the housing market, go ahead. Otherwise, don't stay up worrying about home prices any more than you do about stock prices.

I can't offer any clearer picture, and I don't see a solid basis for anyone else to do so, either.

-- Dr. Robert Shiller, "A New Housing Boom? Don't Count on It," The New York Times (Jan. 26, 2013)

• A real estate recovery is under way (led by multi-family starts), but a full-blown housing recovery is probably a few years away.

Today there is an almost unanimous view (from John Paulson to nearly every other hedge-hogger and talking head) that the strength in housing will be the most important factor (or one of the more important factors) in offsetting the fiscal drag associated with the spending cuts and tax rate increases (necessary to pare down the burgeoning U.S. budget).

To many, a booming housing market seems to be an almost single justification for ambitious economic growth targets and for an enthusiastic view of the U.S. stock market.

Optimism surrounding the housing market wasn't the case 18 months ago -- indeed, back then there was a great deal of skepticism (that I didn't share).