Federal Reserve: signs abound that housing market is entering bubble territory

[Anonymous]

Anonymous wrote:Doesn't the fed have a steak in wanting to cool the market? Well a note like that will cool the market.

lol a “steak” 🥩

[Anonymous]

Anonymous wrote:

Anonymous wrote:Doesn't the fed have a steak in wanting to cool the market? Well a note like that will cool the market.

lol a “steak” 🥩

They only want the market to heat up to medium rare. That's the perfect amount. Rare is too cold and well done is...well, done and going to pop.

[Anonymous]

The recent increases in home prices haven’t really made sense. There is inflation and I’d expect a good increase but not 40%. Especially not in a city that is losing population.

I get nervous when people act frenzied and there is talk that sounds like FOMO.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lotta speculators, investors, people who bought at peak FOMO, and RE agents are in denial ITT. The Federal Reserve must be wrong when they use the B word. Prices on assets only ever go up, amirite?

Clickbait gets the clicks, amirite?

What specifically do you think is going to happen to “pop” this “bubble”?

Not the PP, but who knows. Could be anything. We won’t know until we know.

I’m more worried that we have an “all asset” bubble that will take stocks down too. The minor stock market correction earlier this year didn’t affect things much.

+1. Ever hear of credit default swaps before 2008? Because that is what really caused things to go nuclear. Yes, in 2007–8 there was an increase in foreclosures (FOMO ended in 2006, people couldn’t afford the crazy mortgages they took out at the same time prices were declining, and those people who couldn’t afford their payments also couldn’t sell for what they bought so they walked away), but it was the liquidity crisis caused by banks doing risky things with mortgage products that really caused the tailspin. That is what caused the 2008 crisis (Lehman and Bear Stearns going under, etc) that caused recession and job loss, which is what really caused the vast majority of foreclosures in 2008-12. Do you really think banks have stopped taking risks? And do you really think normal people stopped taking risks, too? Just look at all the crazy stuff investors are doing right now to get into real estate. Normal people quitting their jobs, taking out HELOCs and cash out refis on multiple houses, etc.

Right now we are already on the brink of a recession. For two years people have been FOMOing into houses they can’t afford. Prices are way out of line with incomes. Banks will loan you way more than you can afford (not everyone will be smart enough not to buy at the top of their preapproval, especially when OMG I have to buy now or less be priced out forever, homes only go up!).

Being “house poor” doesn’t mean people “can’t afford” their homes.

How are they going to default on their loans? Lose their jobs while unemployment is crazy low?

Market cooldown <> bubble popping.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lotta speculators, investors, people who bought at peak FOMO, and RE agents are in denial ITT. The Federal Reserve must be wrong when they use the B word. Prices on assets only ever go up, amirite?

Clickbait gets the clicks, amirite?

What specifically do you think is going to happen to “pop” this “bubble”?

Not the PP, but who knows. Could be anything. We won’t know until we know.

I’m more worried that we have an “all asset” bubble that will take stocks down too. The minor stock market correction earlier this year didn’t affect things much.

So…irrational fears.

Rapidly rising interest rates, a threat of an impending recession, 40 year highs of inflation, an gross over speculation in the housing market at not 'irrational' fears.

[Anonymous]

Anonymous wrote:Be wary of over confidence on either side. For my job I get exposure to some of the greatest minds on finance, and the amount of folks that predicted that the market would hit all time highs in the midst of record setting coronavirus numbers and new variants is zilch. The point being, people on an anonymous forum, most of whom are lawyers, doctors, lobbyists, stay at home moms, won’t be able to predict what happens to asset prices, so stop mentally masturbating on here even though it can be fun because it’s a waste of time.

They didn't predict a record high because it is fake.

All US assets from housing to stocks are grossly overvalued because of the Federal Reserve, massive amounts of money printing, massive injection of multi trillion dollar stimuluses, and too much credit liquidity. It is a fake diabetic sugar rush. Bubbles built on cheap and easy money they produce an environment of irrational exuberance when people all think stocks or housing only ever go up always end so badly when the sugar rush ends.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lotta speculators, investors, people who bought at peak FOMO, and RE agents are in denial ITT. The Federal Reserve must be wrong when they use the B word. Prices on assets only ever go up, amirite?

Clickbait gets the clicks, amirite?

What specifically do you think is going to happen to “pop” this “bubble”?

Not the PP, but who knows. Could be anything. We won’t know until we know.

I’m more worried that we have an “all asset” bubble that will take stocks down too. The minor stock market correction earlier this year didn’t affect things much.

So…irrational fears.

Rapidly rising interest rates, a threat of an impending recession, 40 year highs of inflation, an gross over speculation in the housing market at not 'irrational' fears.

But even if all of those thing happen how would that lead to anything more than a cooldown?

People need a place to live. Housing is not purely an investment that can lose all value. Unless massive amounts of people are foreclosing we won’t see another bubble.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Be wary of over confidence on either side. For my job I get exposure to some of the greatest minds on finance, and the amount of folks that predicted that the market would hit all time highs in the midst of record setting coronavirus numbers and new variants is zilch. The point being, people on an anonymous forum, most of whom are lawyers, doctors, lobbyists, stay at home moms, won’t be able to predict what happens to asset prices, so stop mentally masturbating on here even though it can be fun because it’s a waste of time.

They didn't predict a record high because it is fake.

All US assets from housing to stocks are grossly overvalued because of the Federal Reserve, massive amounts of money printing, massive injection of multi trillion dollar stimuluses, and too much credit liquidity. It is a fake diabetic sugar rush. Bubbles built on cheap and easy money they produce an environment of irrational exuberance when people all think stocks or housing only ever go up always end so badly when the sugar rush ends.

Agree on stock market.

Housing is different. People need a place to live. Unless people are foreclosing we won’t have a bubble “pop”.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Be wary of over confidence on either side. For my job I get exposure to some of the greatest minds on finance, and the amount of folks that predicted that the market would hit all time highs in the midst of record setting coronavirus numbers and new variants is zilch. The point being, people on an anonymous forum, most of whom are lawyers, doctors, lobbyists, stay at home moms, won’t be able to predict what happens to asset prices, so stop mentally masturbating on here even though it can be fun because it’s a waste of time.

They didn't predict a record high because it is fake.

All US assets from housing to stocks are grossly overvalued because of the Federal Reserve, massive amounts of money printing, massive injection of multi trillion dollar stimuluses, and too much credit liquidity. It is a fake diabetic sugar rush. Bubbles built on cheap and easy money they produce an environment of irrational exuberance when people all think stocks or housing only ever go up always end so badly when the sugar rush ends.

Right but the money printing occurred and how much of the recent housing prices are simply a result of inflation?? Would housing prices decrease during a time of continued inflation?

Agree some unprecedented events took place. Especially the printing press and checks sent out to everyone. Also the low rates. While I definitely question this FOMO real estate market we are in, I’m not convinced there will be any sort of crash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lotta speculators, investors, people who bought at peak FOMO, and RE agents are in denial ITT. The Federal Reserve must be wrong when they use the B word. Prices on assets only ever go up, amirite?

Clickbait gets the clicks, amirite?

What specifically do you think is going to happen to “pop” this “bubble”?

Not the PP, but who knows. Could be anything. We won’t know until we know.

I’m more worried that we have an “all asset” bubble that will take stocks down too. The minor stock market correction earlier this year didn’t affect things much.

+1. Ever hear of credit default swaps before 2008? Because that is what really caused things to go nuclear. Yes, in 2007–8 there was an increase in foreclosures (FOMO ended in 2006, people couldn’t afford the crazy mortgages they took out at the same time prices were declining, and those people who couldn’t afford their payments also couldn’t sell for what they bought so they walked away), but it was the liquidity crisis caused by banks doing risky things with mortgage products that really caused the tailspin. That is what caused the 2008 crisis (Lehman and Bear Stearns going under, etc) that caused recession and job loss, which is what really caused the vast majority of foreclosures in 2008-12. Do you really think banks have stopped taking risks? And do you really think normal people stopped taking risks, too? Just look at all the crazy stuff investors are doing right now to get into real estate. Normal people quitting their jobs, taking out HELOCs and cash out refis on multiple houses, etc.

Right now we are already on the brink of a recession. For two years people have been FOMOing into houses they can’t afford. Prices are way out of line with incomes. Banks will loan you way more than you can afford (not everyone will be smart enough not to buy at the top of their preapproval, especially when OMG I have to buy now or less be priced out forever, homes only go up!).

In it just one poster who pollutes every real estate thread with constant references to FOMO, or have multiple people been infected with this idiocy? Regardless, it seems like this person/people are determined to believe that the only reason others are moving these days is some juvenile compulsion. I have no ides why she/they are so invested in this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lotta speculators, investors, people who bought at peak FOMO, and RE agents are in denial ITT. The Federal Reserve must be wrong when they use the B word. Prices on assets only ever go up, amirite?

Clickbait gets the clicks, amirite?

What specifically do you think is going to happen to “pop” this “bubble”?

Not the PP, but who knows. Could be anything. We won’t know until we know.

I’m more worried that we have an “all asset” bubble that will take stocks down too. The minor stock market correction earlier this year didn’t affect things much.

So…irrational fears.

Did you not even read the Fed's article? Over 30% of hikes are being bought by investors. These aren't people or entities that need a place to live, they're treating housing like it is the stock market. If there's any sign of a recession/economic slowdown or rates rise so high that people can no longer to afford to borrow to buy stupidly jacked up prices for homes that are flip jobs done by speculators/investors then investors will start panicking and try to unload their bags to exit before everyone else. It will lead to a cascading effect for a sell off, plus the 30% of investors will simply buy less.

It is all a giant asset bubble detached from fundamentals, as per the Fed.

Rapidly rising interest rates, a threat of an impending recession, 40 year highs of inflation, an gross over speculation in the housing market at not 'irrational' fears.

But even if all of those thing happen how would that lead to anything more than a cooldown?

People need a place to live. Housing is not purely an investment that can lose all value. Unless massive amounts of people are foreclosing we won’t see another bubble.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lotta speculators, investors, people who bought at peak FOMO, and RE agents are in denial ITT. The Federal Reserve must be wrong when they use the B word. Prices on assets only ever go up, amirite?

Clickbait gets the clicks, amirite?

What specifically do you think is going to happen to “pop” this “bubble”?

Not the PP, but who knows. Could be anything. We won’t know until we know.

I’m more worried that we have an “all asset” bubble that will take stocks down too. The minor stock market correction earlier this year didn’t affect things much.

So…irrational fears.

Rapidly rising interest rates, a threat of an impending recession, 40 year highs of inflation, an gross over speculation in the housing market at not 'irrational' fears.

But even if all of those thing happen how would that lead to anything more than a cooldown?

People need a place to live. Housing is not purely an investment that can lose all value. Unless massive amounts of people are foreclosing we won’t see another bubble.

Did you not even read the Fed's article? Over 30% of hikes are being bought by investors. These aren't people or entities that need a place to live, they're treating housing like it is the stock market. If there's any sign of a recession/economic slowdown or rates rise so high that people can no longer to afford to borrow to buy stupidly jacked up prices for homes that are flip jobs done by speculators/investors then investors will start panicking and try to unload their bags to exit before everyone else. It will lead to a cascading effect for a sell off, plus the 30% of investors will simply buy less.

[Anonymous]

*hikes = homes....arghhhh sorry, this phone has horrible autocorrect

[Anonymous]

Anonymous wrote:

Anonymous wrote:“Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Reasons for concern are clear in certain economic indicators—the price-to-rent ratio, in particular, and the price-to-income ratio—which show signs that 2021 house prices appear increasingly out of step with fundamentals.”

The whole article is about how there is a bubble - the fallout might not be as bad as as 2008 but bubble nonetheless. Warning signs are flashing all over.

Market cooling <> bubble

You think there will be a bunch of bankruptcies? Foreclosures?

I think when people’s homes are underwater they walk away. Especially second homes - vacation or rental.

[Anonymous]

Anonymous wrote:*hikes = homes....arghhhh sorry, this phone has horrible autocorrect

I’m reading on a little phone screen. Where does this article say 30% homes bought by investors? What is exact quote?