Today’s topic is the question that everyone keeps asking: “Are we in a housing bubble?” I can safely say that our market is on fire right now. Sellers are having to sift through multiple offers, and many homes are selling for more than $100,000 over asking price! I haven’t seen a market like before in my whole life—the only market resembling ours was the one we had between 2005 and 2007, but guess what happened after that market?
That bubble exploded, leading us into the worst recession in our history. Housing prices dropped and only continued to do so in the following years. So is that what’s in store for our market, a bubble that’s close to popping? Today I’ll share six reasons why, contrary to popular belief, it isn’t.
Feel free to follow along in the video above or else use the timestamps below to navigate our discussion at your leisure:
2:26—Inventory is at a record low
3:18—Builders can’t keep up with the demand for homes
4:46—Mortgage rates remain historically low
5:14—Demographic trends are creating new buyers
5:40—Lending standards remain strict
6:32—Foreclosure activity is muted
Beyond a housing bubble, we have an even bigger problem that no one seems to be talking about: We could potentially run out of housing. I can’t use a crystal ball to tell you exactly what the future holds, but I can say, from watching the daily activity of the market, that we simply don’t have enough supply to meet demand.
Unless interest rates rise and buyer power is reduced, the market will continue like this for quite some time. And with the pandemic, everything has changed. People can now work remotely, allowing them to live anywhere. Even most financial gurus are saying that now is the time to go out and buy a home.
If you have any questions about buying or selling a home in today’s market or about the housing market in general, don’t hesitate to reach out to us. We’d love to help you.