“The thing to buy now is homes,” he tells Yahoo. “They’re really, really cheap. This market just begs to be bought.”
U.S. home prices fell 0.8 percent in January to the lowest level since early 2003, according to the S&P/Case-Shiller 20-city composite index.
Stocks, meanwhile, have been on a tear, making them overpriced, Stein says.
“We have had an astounding rally. If you think of the rally from early March 2009 until now, it is just breathtaking.”
The Standard & Poor’s 500 Index has soared 117 percent from its March 2009 low.
“This market is discounting a very substantial [economic] recovery,” Stein says. “Unfortunately the recovery doesn’t seem to be here yet, and markets are very far from being perfect predictors. At this point, I would not be confident buying a lot of stock at these levels.”
While the economy expanded 3 percent in the fourth quarter, many expect that pace to slow down. The UCLA Anderson forecast pegs first-quarter growth at 2 percent.
The time to buy stocks is when prices are at “abnormal lows,” Stein says.
Many experts, like Stein, anticipate at least a correction for stock prices. “We just got a little bit ahead of ourselves right now,” Jason Cooper, a money manager at First Source Investment Advisors, tells Bloomberg.
“Some of the data points aren’t all that positive.”
Read more: Ben Stein: Buy Homes, Not Stocks