The residential real estate market continues to experience sharp decline in prices. Residential real estate has posted another record decline in the S&P Case/Shiller Home Price index released last Tuesday. It showed home prices plummeting 10.7% in the 12 months ending January. That marks their lowest level since the index was launched in 2000.

"Affordability is actually quite high," he said. "This is a pretty good market to consider taking the plunge. And it's going to get better as we go forward."

Subprime fallout. Across the nation, the market for lower-priced homes has been the most volatile over the last 12 months, a phenomenon Shiller thinks is a result of the ongoing subprime crisis.

"It's going to take those markets a long time to recover," Shiller said.