Four reasons why our real estate market won’t crash anytime soon.

Are we headed for a housing crash? Are home prices going to come down anytime soon? While I don’t have a crystal ball to show me exactly what the future holds, I want to present four quick reasons why I don’t think we’re in a bubble:

1. We don’t have relaxed lending. In the 2007 to 2008 crash, one of the biggest problems was relaxed lending standards. People who simply weren’t qualified were allowed to purchase houses—often with very little money down. Lending standards have tightened since then, so I don’t see that as a problem this time around.

2. People have equity today. During the last crash, a lot of people didn’t have any equity in their homes. As soon as the market turned a little bit, many found that they owed more than their homes were worth and got stuck. Homeowner equity is at an all-time high today, so that won’t be an issue.

“It doesn’t look like our market will crash anytime soon.”
3. There is a disparity between supply and demand. There’s just a lot more demand than supply in the market. Leading up to the 2007 crash, home builders averaged 11 million homes a year. They almost stopped completely after the crash, and now, they’re only averaging 7 million homes a year. We need about 4 million more homes to be built per year, so it will be a while before our supply catches up to the demand.

4. People are paying cash. Many buyers are paying cash for their new homes or are at least well-funded. That has created a much more stable real estate market, one’s that certainly more stable than the 2007 market.

Again, I can’t tell the future, but it doesn’t look like our market will crash anytime soon. If you have any questions, feel free to text or email me. I would love to hear from you!