1/ Is history repeating itself in the US housing market? Economic historians are well aware that Florida often turns out to be Ground Zero for housing market crashes. This was the case in 1929 and in 2008. Is the decline in condo prices telling us a housing bubble is popping? 🧵
2/ We are starting to see price declines in various American metro areas. This is leading some to call a bursting housing bubble. Florida has a reputation for being a canary in a coalmine for house price crashes - let's see why.
3/ Here is a list of the top 10 metro areas that saw the initial substantial declines in price in 2006, as the housing bubble unwound that would lead to the 2008 financial crisis.
4/ Now here is the list of the top 10 metro areas that are decline as of August 2025.
5/ It looks like a very different list. But one state stands out: Florida. Florida is featured prominently on both lists. Phoenix, Arizona is too - another notorious housing bubble metro area.
6/ Many forget today but the Florida land boom in the 1920s led directly to the run-up in stock market valuations and, eventually, the crash and the Great Depression.
7/ "The Florida land boom of the 1920s established the mood 'and the conviction that God intended the American middle classes to be rich,' a sentiment so strong that it survived the ensuing crash of property prices."
8/ Today we see both property prices and stock market valuations at nosebleed heights simultaneously. This is more similar to 2008 than to 1929 where the market rocketed after the crash of Florida land prices in 1926.
9/ So, what is going on with Florida condos today? After a tragic collapse of a condo in Surfside in 2021 that killed 98 people Florida brought in strict building regulations that have destroyed the market for condos - making them too expensive to maintain to be worth owning.
10/ This might seem like a random event. But housing markets operate on a 'chaos theory' logic. A butterfly that flaps its wings on one side of the world can cause a hurricane on the other. This appears to be happening in Florida as the condo prices feed into all prices.
11/ It is no secret that policymakers are worried about the US housing market. Trump has explicitly linked his push for lower interest rates with the housing market.
12/ Is this really a surprise? Trump is a real estate guy. He has a "feel" for these markets. And don't forget that he is very familiar with the Florida market - as he has an extensive portfolio of property there.
13/ All eyes are now on the rate cuts. Typically, outside of unusual events like the pandemic and the lockdowns, when house prices start to decline there is no reversing them. But what is true of the past might not be true in the future. A rate cut might reverse these trends.
14/ If it does not the US housing market might crash. If this happens I would be surprised if it did not take the stock market with it. Given that the US dollar is already in decline, I would expect a financial crisis to be the final nail in the coffin.
In Germany everything is going according to plan. With the low IQ private equity puppet installed, the American firms are starting to take German industry apart. No one in Germany says anything. They just quietly allow the demolition to continue. Sad. 🇩🇪📉
