Sure, we could get a RE downturn in a big recession. However RE doesn’t always go down in recessions. And it didn’t do that well in the giant 90s economic boom.
Then there is a certain upside risk us data-driven investors are not very good at dealing with: the risk there will be another bubble that sends prices up 30-40% over 2-3 years. I am not counting on that, but the absurd cryptocurrency bubble of mid-2017-early-2018 is a reminder such things can happen out of nowhere.
We are in some ways even more primed for such a bubble now than when it actually happened: economy is stronger now than in 2004, population is higher, rates are lower, and new construction is also lower and even more burdened by regulatory hurdles and tight labor markets.
The main thing we don’t have are liar loans funded by private MBS. But bubbles can happen without absurd lending.
