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

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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]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.[/quote]

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

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:

[b]"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."[/b][/quote]

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. [/quote]

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. 
[/quote]

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