REAL ESTATE MARKET BUBBLE?

Current Conditions of the Real Estate Market

It’s no secret that we are in a strong real estate market. These are the questions I am often asked:

• Are we in a housing bubble?

• Is the market similar to 2006/2007?

• Where is the market headed?

After the housing crash, it’s no surprise people are wondering if we are headed in the same direction. The market has been strong and shows no signs of stopping. Let me share a few factors with you why we are not!

Low Inventory

In July 2007, there were 4 million homes on the market. In March 2021, there were 1 million homes for sale (Realtrends.com). There is a shortage of homes for the pool of buyers, which causes prices to rise. Our National Association of Realtors chief economist states, “ This is not a bubble. It is simply a lack of supply.” In addition, the current high cost of building a home is driving a desire for pre-built homes.

Low Interest Rates

While interest rates will be creeping up, they are still historically low. From what I’ve read, we can expect the interest rate to rise to around 4% by the end of 2022, which is still amazingly low.

Tight Lending Guidelines

There is a long standing joke in real estate that anyone with a pulse could have received a mortgage in 2004, without any sort of documentation. Those days are long gone. Today, lenders have tight guidelines, verifying credit ratings, income, employment and savings. The buyers are truly qualified.

Greater Equity

This may be the biggest difference of all. “Rising home prices and greater savings rates have increased equity for millions of U.S. owners. A first quarter report from ATTOM Data Solutions, found that one in three of the 55.8 million mortgaged homes was “equity-rich,” with loans 50 percent or less of estimated market value.” (realtrends.com)

That is big! Consumers understand their home is a big investment.

So what does that mean for you?

Whether you have owned your home for a year or many, the good news is your equity continues to grow and you have made a sound investment.

If you are thinking about making a move, now may be a good time. If you need to sell your home first, you will get top dollar, and keep in mind interest rates are historically low.

The biggest question on your mind is probably, “where will I go next if there is such a shortage in homes on the market?” I can help you with that. I can access our Realtor private network and the network of my Realtor colleagues. If this is on your mind, let’s talk.

Curious on the value of your home? Click the link below to get an automatic home value!

https://www.stevegarrisonrealestatebroker.com/selling-home