You’re right — some of what is being done is prolonging the necessary and painful.
Some of what the Fed is doing is preventing complete lock-ups in debt markets.
Anything that props up the price of housing is preventing the necessary and inevitable.
Propping up over-leveraged and illiquid banking positions aren’t necessarily bail-outs - if the credit markets lock up and cease functioning, a whole lot of other crap will hit the fan - and quickly. So the Fed has a job under their “open market” mission to keep the debt markets functional.
People are going to learn, the hard way, that housing is an asset just like any other. The propaganda from the NAR, et al, has to be firmly and finally debunked (matter of fact, the NAR should be investigated for fraud and deceptive marketing practices). Housing isn’t exempt from being over-valued simply because you can live in it.
The reality of what has happened in the last 10 years in the real estate markets is this:
Mortgages turned into margin loans. Housing bubbled, then peaked.
And now bankers are realizing that they don’t have a way of making a margin call on real estate.
>>Housing isn’t exempt from being over-valued simply because you can live in it.<<
That reminds me of a phrase I have always hated: “Real estate will always go up becuase they aren’t making any more of it.”
That is pure baloney to anyone that has flown, during the day, from the west coast to the east coast. The phrase should read: “they aren’t making any more of it WORTH USING/AVAILABLE”. But then everyone would laugh at that because it would be a false statement.
Who would waste money on some of that useless crap in northeastern California becuase “it’s real estate and they aren’t making any more of it”.
Yeah, sure, your great-great grandchildren may reap the benefits of your wise purchase, but by then the property taxes would have paid for it a hundred fold...
I think a major part of our problem was that the “owned residence as investment” mentality which has been growing for many decades hit the end of the parabolic curve a couple of years ago. We are entering a time where the general population will see owning your own home in a different perspective. Heck, I owned for 18 years. I’ve been renting for ten and LOVE IT.
‘Course, in those ten years, my quality of residence and neighborhood has gone up and the rent has gone down. And this is in the seattle area. Go figure.