The housing market has seen the burning-candles-at-both-ends phase. The median sales price for houses in the UL at the end of 2020 Q1 was $322,600. A year later, the median price was up to $449,300, an increase of 39.3% in two years.
Everyone knows this basically can't go on forever. Prices have to come down, but how much, where, and over what period of time? The drop from the end of 2006 to the end of 2008 dropped by 19% from $257,400 to $208,400.
There's no apparent massive wave of foreclosures to flood markets with so much supply that it would kick the legs out from the stool. The Federal Reserve has been shrinking its balance sheet by walking away from supporting the mortgaged-backed securities market, which pushes up yields on those securities and then the mortgages underlying them.
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