Academic Robert Shiller once called the stock market’s performance “irrational exuberance” in a 2000 book title—it presciently foresaw the bursting of the dot-com bubble. He says another such bubble is about to deflate, albeit slowly: housing. 

Burgeoning home prices cannot keep going up, and eventually will drop, he told a Yahoo Finance video program. “They’ll come back down, not overnight, but enough to cause some pain,” Shiller said.

Sure, Yale professor Shiller is a prominent perma-bear, yet his reasoning is worth listening to. He has long specialized in residential real estate, and even developed a price index for the field, along with the late Karl Case, a fellow economist.

There’s no denying that the housing scene has gotten frothy. The latest S&P CoreLogic Case-Shiller national home price index, for March, showed a 13.2% annual increase. That marks the fastest rise since…

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