From the Wall Street Journal article "Fed Felt Hamstrung By 2005 Bubble":
Janet Yellen, then the San Francisco Fed president and now the Fed vice chairman, said at the June 2005 meeting that newer financing options, such as interest-only mortgages, were widely viewed as "feeding a kind of unsustainable bubble." But she suggested that higher prices themselves were "curtailing effective demand for housing at this point and that house appreciation probably is poised to slow. So the increasing use of creative financing could be a sign of the final gasps of house-price appreciation at the pace we've seen and an indication that a slowing is at hand."
Aside from reviewing complex models for home prices and the economy, one central-bank economist, David Stockton, even presented officials later that year with a piece of anecdotal evidence that "almost surely suggests that the end is near in this sector."
Mr. Stockton had been channel-surfing and came across a new television series "Flip That House," he told central bankers in the Fed's boardroom, drawing laughter.
"As far as I could tell, the gist of the show was that with some spackling, a few strategically placed azaleas, and access to a bank, you too could tap into the great real estate wealth machine," he said. "It was enough to put even the most ardent believer in market efficiency into existential crisis."