The ride is over. Big time.
This is only a local fed branch, but someone said it, so now it is out there in the public.
RT:
The Federal Reserve Bank’s Dallas branch has warned of a “brewing US housing bubble,” saying that prices have surged beyond levels justified by market fundamentals, creating risk of a market collapse.
“There is growing concern that US house prices are again becoming unhinged from fundamentals,” Fed economists said in a research report posted earlier this week. “Our evidence points to abnormal US housing market behavior for the first time since the boom of the early 2000s,” they added.
That boom preceded a market bust, triggering the 2007-2009 global financial crisis. However, if the current bubble bursts, it wouldn’t likely cause as much economic fallout because consumers aren’t as financially overextended as they were in the early 2000s, and excessive borrowing doesn’t appear to be fueling the current price rally, the Fed said.
I don’t think that last part is true.
This is all a fake economy.
A house is only worth like $25,000-35,000 in materials. So if it is selling at $3 million, you have something different happening.
I can tell you what happened: it’s called “inflation.”
When the dollar stops holding value and interest rates are ultra low, people start monetizing assets. So, when the fed started printing all this money during the coronavirus, all of that money had to go somewhere. So it went into the prices of stocks and property. Plus crypto and collectibles and everything else. I saw someone post that although his house’s value has gone up drastically, his classic Porsche 911 is worth more than his house.
This is something that the government is supposed to manage, to allow money to be a stable means of exchange, which prevents bubbles. To be printing infinity money and have infinitely low interest rates means that the money cannot maintain its value, so people put the money into real and financial assets, and thus you get bubbles.
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