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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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. [/quote]

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. [/quote]

Agree on stock market.

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

[/quote]

This is EXACTLY (word for word) what all of the economists said when they were explaining why there wouldn’t be a crises in 2007.

I don’t know if the bubble will pop or not, but people saying stuff like this to explain why it won’t makes me think it’s more likely, rather than less. [/quote]

It’s much different today. Predatory lending is not rampant. ARM loans aren’t going to jump out of control.

People were foreclosing because they were in precarious financial situations. That’s not the case today. 
[/quote]

No, people were for closing because they were in precarious financial situations [i]and they could not sell their house for what they bought it for.[/i]

Do you really think everyone who bought at the top of their DTI last year is in a great financial spot? Do you not see how inflation is affecting everyday Americans? What about the impending recession?[/quote]

They were trying to sell because they couldn’t pay the mortgage.

Gas & food increases aren’t comparable to huge jumps in mortgages. People can adjust their driving and eating habits. They can’t adjust their mortgage payment. 
[/quote]

Sure you can. You can get roommates. You can rent out your place and move somewhere cheaper.[/quote]

If you can't sell your property for what you paid, why in the world would a renter pay enough to cover your mortgage? Rents would also be done in that scenario. It will be a renter's market (and a buyer's market).  Why would a renter move in with you to help you pay your mortgage when there are a lot of other options? Also, what family with kids wants to take a stranger into their home just to pay the mortgage in an underwater house? Most people would vastly prefer bankruptcy to taking in a boarder just to hang onto an overpriced and underwater asset. [/quote]

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