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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I will translate the portion that you highlighted:

"Housing correction" = housing prices are going to drop; we don't know how much but we are worried that people are going to start panicking so we are trying to prepare people now.

"No expectation that fallout ...would be comparable [to 2007] in terms of magnitude or macroeconomic gravity' = we are trying to prevent another housing crash by issuing this warning; we think that the debt-to-equity ratio in the current borrowers' market is better than in 2007, but it is also not nearly as solid as other experts think it is, which is why we are telling you this so both lenders and buyers can respond with appropriate caution. In other words, stop overpaying for housing because the bubble is eventually going to burst, but also please don't panic (hence we are sending this out of Dallas instead of having the Fed Chair call a press conference.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I don't know how closely you follow the Fed, but when they issue a statement like this it has been vetted by dozens of highly-trained economists. The Fed is incredibly careful not to be alarmist or to overstate economic conditions. The Fed is acutely aware that every single tiny signal that it sends out into the world will have enormous consequences in the market. This is because major market participants know (A) that the Fed knows what its talking about, and (B) the Fed also has the power to effect the market through its manipulation of interest rates. So if the Fed thinks there is a bubble, there is a bubble. If the Fed saysthat there is a bubble, there is a VERY BIG bubble. This is the kind of warning that could spook not only the housing market, but the entire economy. They would not issue this warning if there wasn't a desire reason to do so. And here is part of what they said:

"[The Fed] also found that the surge in disposable income due to pandemic-related fiscal and monetary stimulus, as well as reduced household consumption because of mobility restrictions, may have lessened its usefulness as a gauge -- suggesting that any bubble may be more advanced than those numbers suggest. "

What they are telling market participants is that they should not rely on the typical measure of price-to-income ratio to evaluate the health of the housing market. They are literally saying that the bubble is worse than most experts are likely to appreciate, which is why they are issuing the warning. This is the Fed equivalent of yelling "FIRE" in a crowded theater. They would not spook the market like this unless they absolutely felt it was necessary because people are not appreciating the impending danger.

You say "I don't know how closely you follow the Fed".

I say "I don't know how closely you read what they wrote in this article".

You are saying the fed knows the future but some things are just dog whistles to the informed, so they don't really mean that part, they just have to put it there. Those of us that know the code ignore that part. That's what I call tinfoil hat thinking.

The fact is nobody knows what will happen until it does. But let's at least agree on what is in the article, which I copy and pasted.

I am saying that Fed makes the future. And I'm saying that you don't seem to understand the Federal Reserve system or economics.

Now you are really not making sense. And the strawman + ad-hom doubles down.

So you are saying that the fed can decide if the housing market crashes or not? Since they “make the future”?

If that is true, why would they crash it?

Look, I'm not here to make anyone feel bad. The information is here if you want to make use of it. Experts are telling us that there is a housing bubble, and I'm telling you that these experts are inclined to understate these issues, and also that by merely stating it, the Fed can make housing prices begin to decline. They may be worried about inflation in housing, as someone else suggested, but the most likely explanation is they are trying to stem the crest of price ascent because they already know that the bubble is eventually going to burst. In issuing this warning, they are trying to make the inevitable devaluation curve less severe and prevent an all out panic-driven crash.

My advice to you (and anyone) is to stop fighting the premise and instead protect your assets as best you can. Shore up any vulnerability that you can. If you own property as an investment, this is probably a great moment to sell, unless you can weather a serious downturn in valuation that could span a decade or more. If you own your house and you are not over-extended (ie you can afford your payments) you plan on staying for another 10 years or so, there's no urgency to do anything. If you are planning to buy or trying to buy, this is not the time. Give it another 6 months to a year and see how things look then. Renting is the right move financially at this juncture.

The Fed statement gave a measurable declaration - "not as bad as 2008." If what you say is true, they have specific projections and are making demonstrable, provable lies to the American public in order to manipulate the market.

I agree with the other person who responded to you. Take off the tinfoil.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I don't know how closely you follow the Fed, but when they issue a statement like this it has been vetted by dozens of highly-trained economists. The Fed is incredibly careful not to be alarmist or to overstate economic conditions. The Fed is acutely aware that every single tiny signal that it sends out into the world will have enormous consequences in the market. This is because major market participants know (A) that the Fed knows what its talking about, and (B) the Fed also has the power to effect the market through its manipulation of interest rates. So if the Fed thinks there is a bubble, there is a bubble. If the Fed saysthat there is a bubble, there is a VERY BIG bubble. This is the kind of warning that could spook not only the housing market, but the entire economy. They would not issue this warning if there wasn't a desire reason to do so. And here is part of what they said:

"[The Fed] also found that the surge in disposable income due to pandemic-related fiscal and monetary stimulus, as well as reduced household consumption because of mobility restrictions, may have lessened its usefulness as a gauge -- suggesting that any bubble may be more advanced than those numbers suggest. "

What they are telling market participants is that they should not rely on the typical measure of price-to-income ratio to evaluate the health of the housing market. They are literally saying that the bubble is worse than most experts are likely to appreciate, which is why they are issuing the warning. This is the Fed equivalent of yelling "FIRE" in a crowded theater. They would not spook the market like this unless they absolutely felt it was necessary because people are not appreciating the impending danger.

You say "I don't know how closely you follow the Fed".

I say "I don't know how closely you read what they wrote in this article".

You are saying the fed knows the future but some things are just dog whistles to the informed, so they don't really mean that part, they just have to put it there. Those of us that know the code ignore that part. That's what I call tinfoil hat thinking.

The fact is nobody knows what will happen until it does. But let's at least agree on what is in the article, which I copy and pasted.

I am saying that Fed makes the future. And I'm saying that you don't seem to understand the Federal Reserve system or economics.

Now you are really not making sense. And the strawman + ad-hom doubles down.

So you are saying that the fed can decide if the housing market crashes or not? Since they “make the future”?

If that is true, why would they crash it?

Look, I'm not here to make anyone feel bad. The information is here if you want to make use of it. Experts are telling us that there is a housing bubble, and I'm telling you that these experts are inclined to understate these issues, and also that by merely stating it, the Fed can make housing prices begin to decline. They may be worried about inflation in housing, as someone else suggested, but the most likely explanation is they are trying to stem the crest of price ascent because they already know that the bubble is eventually going to burst. In issuing this warning, they are trying to make the inevitable devaluation curve less severe and prevent an all out panic-driven crash.

My advice to you (and anyone) is to stop fighting the premise and instead protect your assets as best you can. Shore up any vulnerability that you can. If you own property as an investment, this is probably a great moment to sell, unless you can weather a serious downturn in valuation that could span a decade or more. If you own your house and you are not over-extended (ie you can afford your payments) you plan on staying for another 10 years or so, there's no urgency to do anything. If you are planning to buy or trying to buy, this is not the time. Give it another 6 months to a year and see how things look then. Renting is the right move financially at this juncture.

The Fed statement gave a measurable declaration - "not as bad as 2008." If what you say is true, they have specific projections and are making demonstrable, provable lies to the American public in order to manipulate the market.

I agree with the other person who responded to you. Take off the tinfoil.

Sigh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I don't know how closely you follow the Fed, but when they issue a statement like this it has been vetted by dozens of highly-trained economists. The Fed is incredibly careful not to be alarmist or to overstate economic conditions. The Fed is acutely aware that every single tiny signal that it sends out into the world will have enormous consequences in the market. This is because major market participants know (A) that the Fed knows what its talking about, and (B) the Fed also has the power to effect the market through its manipulation of interest rates. So if the Fed thinks there is a bubble, there is a bubble. If the Fed saysthat there is a bubble, there is a VERY BIG bubble. This is the kind of warning that could spook not only the housing market, but the entire economy. They would not issue this warning if there wasn't a desire reason to do so. And here is part of what they said:

"[The Fed] also found that the surge in disposable income due to pandemic-related fiscal and monetary stimulus, as well as reduced household consumption because of mobility restrictions, may have lessened its usefulness as a gauge -- suggesting that any bubble may be more advanced than those numbers suggest. "

What they are telling market participants is that they should not rely on the typical measure of price-to-income ratio to evaluate the health of the housing market. They are literally saying that the bubble is worse than most experts are likely to appreciate, which is why they are issuing the warning. This is the Fed equivalent of yelling "FIRE" in a crowded theater. They would not spook the market like this unless they absolutely felt it was necessary because people are not appreciating the impending danger.

You say "I don't know how closely you follow the Fed".

I say "I don't know how closely you read what they wrote in this article".

You are saying the fed knows the future but some things are just dog whistles to the informed, so they don't really mean that part, they just have to put it there. Those of us that know the code ignore that part. That's what I call tinfoil hat thinking.

The fact is nobody knows what will happen until it does. But let's at least agree on what is in the article, which I copy and pasted.

I am saying that Fed makes the future. And I'm saying that you don't seem to understand the Federal Reserve system or economics.

Now you are really not making sense. And the strawman + ad-hom doubles down.

So you are saying that the fed can decide if the housing market crashes or not? Since they “make the future”?

If that is true, why would they crash it?

Look, I'm not here to make anyone feel bad. The information is here if you want to make use of it. Experts are telling us that there is a housing bubble, and I'm telling you that these experts are inclined to understate these issues, and also that by merely stating it, the Fed can make housing prices begin to decline. They may be worried about inflation in housing, as someone else suggested, but the most likely explanation is they are trying to stem the crest of price ascent because they already know that the bubble is eventually going to burst. In issuing this warning, they are trying to make the inevitable devaluation curve less severe and prevent an all out panic-driven crash.

My advice to you (and anyone) is to stop fighting the premise and instead protect your assets as best you can. Shore up any vulnerability that you can. If you own property as an investment, this is probably a great moment to sell, unless you can weather a serious downturn in valuation that could span a decade or more. If you own your house and you are not over-extended (ie you can afford your payments) you plan on staying for another 10 years or so, there's no urgency to do anything. If you are planning to buy or trying to buy, this is not the time. Give it another 6 months to a year and see how things look then. Renting is the right move financially at this juncture.

The Fed statement gave a measurable declaration - "not as bad as 2008." If what you say is true, they have specific projections and are making demonstrable, provable lies to the American public in order to manipulate the market.

I agree with the other person who responded to you. Take off the tinfoil.

No one is saying they are lying. Are you reading anything that's being said here? READ the responses that explain what the Fed is doing and what it means.

[Anonymous]

A research note written by economists at the Dallas Fed do not speak for "The Fed" (ie., the Board of Governors).

The regional Federal Reserve Banks have full license to publish whatever they want when it comes to research, predictions, etc. This article was not vetted by anyone at the Fed Board nor does it speak on behalf of "The Fed."

The language used in the note is quite measured and there's a bunch of posters on this thread (trolls?) who are sensationalizing the research note and adding hyperbole.

[Anonymous]

I’m in the it’s too complicated to predict bucket. Economists seek out historical patterns to form predictions. Those predictions fail when too many factors that don’t have historical data points are present.

1. Demand - lower or higher population in the buying demographic, interest rates rising or lowering above an unknown affordability or ROI ceiling

2. Supply - inventory increases or decreases based on costs/ROI building new houses, demographic bubbles ie seniors retiring/dying, climate change (flood or fire zone changes)

While all of the above is definable, getting the definition right isn’t as easy anymore. For example, seniors were afraid to move into assisted living or condos during the pandemic. Hard to predict whether in a year or two they will exit en masse or not. On supply, will the cost to build come down or are there other factors at play? One of the reasons lumber is so expensive is that climate change has allowed infestations of tree killing beetles to destroy large portion of Canadian forests. Has zip to do with stimulus checks, interest rates or shipping costs.

Climate is the big wild card because it creates more demand with people migrating out of impacted areas while reducing supply as others don’t move into the impacted area.

Foreign investment is another unknown. US real estate is basically a parking lot for foreign money laundering and tax evasion. Tighten up the regulations and demand will drop while supply goes up.

[Anonymous]

Anonymous wrote:
I will translate the portion that you highlighted:

"Housing correction" = housing prices are going to drop; we don't know how much but we are worried that people are going to start panicking so we are trying to prepare people now.

Really? Where does it say that? Wouldn't stagnation of prices also equate a correction? And isn't that the form corrections take in the real estate market, traditionally, especially when viewed with a reasonable time frame?

Anonymous wrote:"No expectation that fallout ...would be comparable [to 2007] in terms of magnitude or macroeconomic gravity' = we are trying to prevent another housing crash by issuing this warning; we think that the debt-to-equity ratio in the current borrowers' market is better than in 2007, but it is also not nearly as solid as other experts think it is, which is why we are telling you this so both lenders and buyers can respond with appropriate caution. In other words, stop overpaying for housing because the bubble is eventually going to burst, but also please don't panic (hence we are sending this out of Dallas instead of having the Fed Chair call a press conference.

Yeah, this is you putting on the tinfoil hat again and spinning what it written to suit your narrative. It just isn't what they wrote.

Look, you can't have it both ways. Either what the fed wrote is what they think or it isn't. Pick.

[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.

Much like the irrational exuberance of FOMO.

[Anonymous]

Anonymous wrote:A research note written by economists at the Dallas Fed do not speak for "The Fed" (ie., the Board of Governors).

The regional Federal Reserve Banks have full license to publish whatever they want when it comes to research, predictions, etc. This article was not vetted by anyone at the Fed Board nor does it speak on behalf of "The Fed."

The language used in the note is quite measured and there's a bunch of posters on this thread (trolls?) who are sensationalizing the research note and adding hyperbole.

This is correct.

The Federal Reserve Bank of Dallas is part of the Federal Reserve System (because of course it is). But the papers written by staff-level economists are very different things than the statements of "The Fed." The latter indicates how policymakers are thinking, and thus get scrutinized in excruciating detail in case any nuance in choice of words might signal what the Fed policymakers will do in the future. The former is just a presentation of research, and while it being published by Fed economists will give that research more weight than some other economic research, it's a much different thing than "The Fed" speaking on a topic. I'm not up on how it works in the Fed, but in other agencies with lots of economists (e.g., the FTC), the economists have lots of leeway in their research; IIRC, for example, they don't have to get their research approved by the Commission before publishing. It's part of how the Fed and the FTC and other agencies with lots of Ph.D. economists manage to attract and keep those economists—by letting them do research that doesn't have to be approved by the political levels.

That's why there's this big disclaimer at the bottom of the article in question, for example:

The views expressed are those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System.

That's not just boilerplate. They actually mean it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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?

Where was the 30% quote?

Sorry, getting the articles I read this morning crossed, but the Fed writing was linked to by this article:

https://www.msn.com/en-us/money/markets/signs-of-a-housing-bubble-are-brewing/ar-AAVGLv1

Investors now buy 33% of the homes in the US, which is a 5% larger share than the average over the past decade, according to John Burns Real Estate Consulting. The business of ibuying -- in which a company buys a home for cash to slightly fix it up and resell it again -- is only 1.7% of the national housing market in the last quarter of 2021, according to Zillow. But in some cities, the share of homes going to ibuyers is as high as 11%.

Looks like they also include second homes in this %.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I will translate the portion that you highlighted:

"Housing correction" = housing prices are going to drop; we don't know how much but we are worried that people are going to start panicking so we are trying to prepare people now.

"No expectation that fallout ...would be comparable [to 2007] in terms of magnitude or macroeconomic gravity' = we are trying to prevent another housing crash by issuing this warning; we think that the debt-to-equity ratio in the current borrowers' market is better than in 2007, but it is also not nearly as solid as other experts think it is, which is why we are telling you this so both lenders and buyers can respond with appropriate caution. In other words, stop overpaying for housing because the bubble is eventually going to burst, but also please don't panic (hence we are sending this out of Dallas instead of having the Fed Chair call a press conference.

You sound very young.

A correction is not a collapse.

Markets get hot - and they get cold. That’s all normal.

If the markets cool, less desirable areas/properties might sit for longer and prices may flatten or even decrease. But the DC area should generally be fine. Deep breaths.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I don't understand why you think people just walk away if their house is underwater, second homes included. If you need a place to live or don't need to sell your second home, you wait it out until the value rises again. It isn't like your home is a checking account where you suddenly have less money to spend.

Lots of people who could've have afford their mortgage payments in 2006 walked away from their homes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I will translate the portion that you highlighted:

"Housing correction" = housing prices are going to drop; we don't know how much but we are worried that people are going to start panicking so we are trying to prepare people now.

"No expectation that fallout ...would be comparable [to 2007] in terms of magnitude or macroeconomic gravity' = we are trying to prevent another housing crash by issuing this warning; we think that the debt-to-equity ratio in the current borrowers' market is better than in 2007, but it is also not nearly as solid as other experts think it is, which is why we are telling you this so both lenders and buyers can respond with appropriate caution. In other words, stop overpaying for housing because the bubble is eventually going to burst, but also please don't panic (hence we are sending this out of Dallas instead of having the Fed Chair call a press conference.

You sound very young.

A correction is not a collapse.

Markets get hot - and they get cold. That’s all normal.

If the markets cool, less desirable areas/properties might sit for longer and prices may flatten or even decrease. But the DC area should generally be fine. Deep breaths.

I wish I was young. I research property and housing markets for a living. I'm just trying to help here. But far be it from me to question the wisdom of DCUM.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I will translate the portion that you highlighted:

"Housing correction" = housing prices are going to drop; we don't know how much but we are worried that people are going to start panicking so we are trying to prepare people now.

"No expectation that fallout ...would be comparable [to 2007] in terms of magnitude or macroeconomic gravity' = we are trying to prevent another housing crash by issuing this warning; we think that the debt-to-equity ratio in the current borrowers' market is better than in 2007, but it is also not nearly as solid as other experts think it is, which is why we are telling you this so both lenders and buyers can respond with appropriate caution. In other words, stop overpaying for housing because the bubble is eventually going to burst, but also please don't panic (hence we are sending this out of Dallas instead of having the Fed Chair call a press conference.

You sound very young.

A correction is not a collapse.

Markets get hot - and they get cold. That’s all normal.

If the markets cool, less desirable areas/properties might sit for longer and prices may flatten or even decrease. But the DC area should generally be fine. Deep breaths.

I wish I was young. I research property and housing markets for a living. I'm just trying to help here. But far be it from me to question the wisdom of DCUM.

Translation - I got a part time job with the local realtor, who is in my book club, when my kids were all in school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it hilarious that people are genuinely arguing over whether an article by Fed economists is "clickbait." Economists at the fed could give a damn whether their article gets clicks. Citations? Oh, yes, that they care about. But whether randos on the internet click on that page? Man, y'all are hilarious.

Totally. OP and those with similar views are never going to convince the RE agents and other true believers that there is a significant risk of a collapse in housing prices, no matter who says it or what evidence is cited.

You know that is not what the article from the Fed you are quoting, right? Did you even read it?

Here's what it actually says:

"Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom."

I will translate the portion that you highlighted:

"Housing correction" = housing prices are going to drop; we don't know how much but we are worried that people are going to start panicking so we are trying to prepare people now.

"No expectation that fallout ...would be comparable [to 2007] in terms of magnitude or macroeconomic gravity' = we are trying to prevent another housing crash by issuing this warning; we think that the debt-to-equity ratio in the current borrowers' market is better than in 2007, but it is also not nearly as solid as other experts think it is, which is why we are telling you this so both lenders and buyers can respond with appropriate caution. In other words, stop overpaying for housing because the bubble is eventually going to burst, but also please don't panic (hence we are sending this out of Dallas instead of having the Fed Chair call a press conference.

You sound very young.

A correction is not a collapse.

Markets get hot - and they get cold. That’s all normal.

If the markets cool, less desirable areas/properties might sit for longer and prices may flatten or even decrease. But the DC area should generally be fine. Deep breaths.

I wish I was young. I research property and housing markets for a living. I'm just trying to help here. But far be it from me to question the wisdom of DCUM.

Translation - I got a part time job with the local realtor, who is in my book club, when my kids were all in school.

Translation: I am a tenured full professor.