Party Like It’s 1989 by mike · 2004-06-25 Economists at HSBC on Friday waded into the debate over whether the U.S. housing market is overinflated, declaring a bubble exists, something the Federal Reserve has been reluctant to do … “Prices are 10 to 20% too high and can overshoot on the way down,” HSBC’s Morris said, most likely deflating gradually over a few years rather than crashing like stocks. “We think the party stops by mid-2005. A series of rate hikes will cause a reassessment of likely future house price risks and its associated debt, thereby triggering housing’s fall.” Earlier here. Related