Read: https://investmentresearchdynamics.com/uncategorized/the-collapse-of-cre-debt-is-accelerating/
March 2007: Ben Bernanke said the real estate problem was moderate.
June 2023: Jerome Powell said the commercial real estate was under pressure but appears unlikely to threaten the broader financial system.
Read: https://www.forbes.com/sites/johnwake/2018/11/02/the-next-housing-bust/ (Note: this was written in 2018)
Real home prices peaked in 1989, the recession hit in 1990, home prices fell 7% from the peak until the end of 1990, the recession ended in the spring of 1991 but real U.S. home prices continued to fade for years until they bottomed out in 1997, down 14% from the 1989 peak eight years earlier. In dollar numbers, real estate did not reach their previous 1989 highs until 2000 to 2002 in five selected cities (Boston, New York, Los Angeles, San Diego, and San Francisco).
Using the inflation-adjusted Case-Shiller Home Price Index, home prices peaked in Jan. 2006, the recession hit in Dec. 2007, home prices continued to fall for years until they bottomed out in about Jan 2012, having dropped about 30 to 45%. Prices did not reach their previous highs until about 2017.
And now it looks like the 17-year cycle is repeating itself almost exactly. House prices peaked about May 2022, dropped about 5% to 6% (depending on the city - in San Francisco they dropped 13%), and then recovered their previous highs as of October 2023 forming a double-top and are now declining again. If history repeats, and it looks like it will, the recession should hit about January 2025, and then prices should continue to fall (adjusted for inflation) until about 2030.
I hope this doesn't happen, but I am just calling it like I see it. There is definitely a 17-year pattern, and we see this in real estate, among other things.
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