Experts Say Housing Market Isn't in a Bubble
The housing market has been on the rise for years, with prices reaching new heights and sales volumes growing steadily. But recently there have been signs that the market might be in a bubble, with prices increasing at a faster rate than incomes and sales volumes slowing.
With so much talk about an economic slowdown, many people are worried that we might be heading for another housing crash like the one we saw in 2008. However, experts say that the current market conditions are not indicative of a bubble. They point to several positive indicators that show the market is still healthy and growing.
Today Is Nothing Like 2008
The 2008 housing market crash is still vivid in the memories of many homeowners and sellers. But today's market is very different. Odeta Kushi, Deputy Chief Economist at First American, says:
"This is not the same market of 2008. . . . It's no secret the housing market played a central role in the Great Recession, but this market is just fundamentally different in so many ways."
“Among the differences between today’s housing market and that of the 2008 housing crash is that lending standards are tighter due to lessons learned and new regulations enacted after the last crisis. Essentially, that means those approved for a mortgage nowadays are less likely to default than those who were approved in the pre-crisis lending period.”
Today's housing market is also different from the one in 2008 because the number of consumers looking to buy a home currently outnumbers the supply of houses for sale. As Realtor.com notes:
“. . . experts don’t believe the market is in a bubble or a crash is in the cards, like during the Great Recession. The nation is still suffering from a housing shortage that has reached crisis proportions at a time when many millennials are reaching the age when they start to consider homeownership. That’s likely to keep prices high.”
The housing market, according to experts, isn't a bubble and won't burst. Connect with The Perreault Group to get a comprehensive picture of the present situation in our local market.