New Convolution – “Bubble Fatigue”

“Canada’s housing market may still be cooling, but there are fears in some quarters that “bubble fatigue” will pump it back up heading into the spring season.
What economist Benjamin Tal means when he uses that phrase is that home buyers are skeptical about whether the residential real estate market is heading for a sharp price and sales drop.”

– from ‘Home sales slip further, but signs of traction emerge’, The Globe and Mail, 4 Mar 2013

Okay, so just to clarify: ‘Bubble fatigue’ is the process whereby a person who has concerns about the market being overheated gets tired of those concerns, and is thus freed up to buy. Correct?
The webs of intrigue that our minds spin! Not to mention the minds of economists.
“Bubble Fatigue” added to our Bubblexicon, naturally.
– vreaa

19 responses to “New Convolution – “Bubble Fatigue”

  1. The intelligentsia has a million reasons why prices won’t collapse; however, they all ignore the fact that prices are dropping and that the leading indicators suggest prices will continue to fall.

  2. Ralph Cramdown

    Geez, I think I’ve got Bubble Fatigue Fatigue already. Maybe it’s mono.

  3. Maybe “Bubble Fatigue” is the feeling of the bubble should have popped by now, but it hasn’t so they think its not really a bubble must be a soft landing. When people talk about a bubble there’s always that anxouis wait for the burst. In the US it was 2 years from the peak when the bubble bursted, it takes time for the pop.

  4. What about “money fatigue”? If housing is way above rental value, aren’t buyers exhausting their surplus income well into the future?

  5. Not much of a name...

    Bubble fatigue brings me back to my childhood blowing bubbles with soapy water. When I hear that term, all I can think of is the point at which the bubble loses it’s shine right before it bursts.

  6. I do have a soft spot for these economists, they are feeding people what they want to hear: an authoritative authority on a subject. Nobody likes uncertainty, even if that’s the reality of the situation.

  7. Flaherty (and Rae, and Mulcair) are so cute. They think that they can influence a “soft landing” just by snapping their fingers in parliament…

    http://www.ctvnews.ca/business/manulife-withdraws-promotional-mortgage-rate-under-federal-pressure-1.1202129

  8. the bull of black moon

    feeling a bit of fatigue at the G$M? Oh my, there, there, little rag of bully authority… just wait until July 1st, and everything will be different.. not long now.. little over 3 months to go… hang in there

  9. Real Estate Tsunami

    A fatique is something I wear when I go to open houses.

  10. I now really get it. We do not have an RE market stagnation, we just have a buyers fatigue, you know – it is called “shop until you drop”, the housing shopping spree is just in a “drop” stage. If the sellers wait long enough, the buyer’s fatigue very softly transitions to a bubble fatigue when people are get tired from not buying houses.
    To much attention is given to a buyers sentiment assuming there are the buyers out there in sufficient numbers sitting on the fence and poking the bubble – good quality buyers, with the good paying jobs, potentially mortgage qualified at the current RE price point – like people earning 200-300K with the down-payments 100+K – and they do not currently own?

  11. How can we have not had buyer fatigue after so many years and then suddenly within just a few short months of trouble signs “bubble fatigue” sets in? That is preposterous. Too few are even aware there is a problem so it is clearly nonsensical conjecture.

    On the other hand if he had said there was fatigue associated with gloom about the stock markets and gold it might have been more believable. But Vancouver housing?

    Please pass the Gravol. Extra helping tonight. Maalox too.

    • Agreed, I had similar thoughts.
      Different commentators have expressed Tal’s thought in various forms; implying that people are ‘tired’ of all the ‘bubble talk’ (see the ‘what bubble?’ sidebar for some related comments).
      To imply that everybody was happy with a decade of abnormal price increases, but are now fatigued by talk that the market is very overextended, is plainly preposterous… (or, rather, it tells you how most participants wish to see the market).

      P.S.: One particularly sinister obliquely-related variant of this argument is the implication that talk about the bubble is ‘sensationalist’. It’s another attempt to dispel the bear argument without addressing content.
      Bear: “Hey, watch out folks, that’s a bomb, don’t fiddle with it like that; it could blow up!”
      Dissenting person: “Melodrama!”

      • VREAA: I get that attitude all the time when I talk about real estate with friends and family. I am told that I am focusing on the negative, that I am a pessimist who sees the glass half empty, that I am being overly dramatic about the extent of the problem (if there is a bubble, it’s just local, there are no implications for the entire country or for the economy or society in general), and that the notion that Vancouver real estate is in a bubble is just a conspiracy theory cooked up by some anonymous bloggers. This is the thinking I confront all the time. I’ve had to shut up about the real estate bubble because people thought I was some kooky, Debbie-downer, conspiracy theorist who is looking for reasons to be negative.

      • I still get the same hairy eyeball over in Saskatoon when I bring up issues with housing affordability and debt etcetera. This despite coast to coast coverage in the media of the risks to housing and heavy debt loads of Canadians. The folks I talk just shrug and say “so what…it’s still going up here”.

        What can possibly be added.? They are correct.

      • As Nassim Taleb explains it, for one to be right, one must willing to be “wrong” for years, perhaps decades. He wasn’t talking about housing in particular, but large, systemic risks in general. The herd always looks like it is right in the short to medium term. That’s because they’ve got the herd all around them to reinforce them. Whereas the guy warning us of impending doom is a voice in the wilderness, either ignored or ridiculed, his every utterance seemingly disproved by yet another month of solid gains (or another successful space shuttle launch, or another decade with no nuclear reactor meltdown, or what have you). Eventually you’ll be right, but don’t expect accolades. More likely, you’ll hear numerous variations of the the old broken clock analogy.

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