Shiller is very pragmatic and I think he makes a lot of good points. I think the last portion of the article really points out to where we need to go:

“In major cities, we see often the service people can’t live there any more, the firemen, school teachers. This is not the way we want our society. We want affordable housing,” he said.

Shiller said it can’t be all or nothing, and that there has been a big misperception that houses will constantly appreciate.

“Some times people will try to imagine that we can have both high home prices and affordable housing. But I can tell you that doesn’t add up,” he said.

“You either have high home prices or lower home prices and lower home prices are what we want, and people shouldn’t be afraid of that,” said Shiller. “Most of us care about our children and grandchildren, and these people have to buy houses so why would we want high home prices. We want economic growth, we don’t want high home prices.”

San Diego is a prime example of this. When you have a market when someone such as myself making well into the 6 digits can’t afford a middle class home you have a real problem that cannot continue going forward.