Pendulums always swing, they swing back when forces push them back. In R/E, those forces are not us economics geeks, they are the unwashed masses. The masses look at their paycheck, their bank account and their house. They are hesitant to sacrifice too much of that paycheck for too little house and at some point, they are willing to sacrifice a reasonable portion for a nice place. Affordability matters more than macroeconomics.
Anectdotaly, on my street, every house was purchased a few years ago and had a “6” as the first digit in the price, times were good macroeconomically and they sold at a slow and measured pace. In the last six months, half of those houses were “recycled” one way or another (shorts, repos, auctions, etc.) and every one of them had a “2” as the first number of the price. But times are horrible, people are losing jobs and those houses sold in seconds, with frenzied buyers competing like fans at a rock concert. Why, because of affordability, because the difference beetween that 6 and that 2 to the masses means more than anything on any blog or in any newspaper.
