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.

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.

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.

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.

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.

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%.

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.

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.

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.

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.

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.

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.

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.

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.

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."