FIG. 1 HOUSE PRICE AS A MULTIPLE OF INCOME. TOY REFLEXIVE MODEL, N = 144 MONTHS, ONE HORIZON. VERTICAL SPAN IS THE SIMULATED RANGE, NOT ZERO, SO THE CYCLE SHAPE STAYS READABLE. BLUE BAND = BOOM, ORANGE BAND = BUST.
Nobody dialed a "boom." Loosen lending and buyers bid higher, prices chase themselves up (reflexivity), then the loans go bad and it all unwinds. The looser you lend, the bigger the bubble, and the deeper the crash.