Our Market Won’t Crash: Here Are 5 Reasons Why
Five reasons why you don’t need to be worried about a crash.
Are we heading for a market crash? We’ve received this question from many concerned clients recently, so we want to share five reasons why you don’t need to worry about a crash:
1. Mortgage standards are nothing like they were in 2008. One of the biggest factors in the last housing crash was loose lending practices. Almost anyone could receive a mortgage with no money down. Now, standards are much stricter, and buyers are better qualified.
2. Prices are not accelerating out of control. In a normal market, the average home appreciates by 3.5% year over year. Prices are rising a little more than that in our market, but the difference isn’t huge. Home values are currently rising at a healthy and sustainable rate.
"Our low supply will keep prices high."
3. We don’t have a surplus of homes on the market. Before the 2008 crash, we had way too many homes for sale. Now, we have a housing shortage.
4. Increasing wages are keeping homes affordable. While home prices have been increasing, wages have been keeping pace. Mortgage rates are still low from a historical perspective, so it’s still relatively affordable to purchase a home.
5. Homeowners have tons of equity. During the last crash, most homeowners didn’t have much equity. When prices dipped, many of these people had to enter foreclosure. Now, homeowners have tons of equity, so even if prices fall, our market will be okay.
If you have questions about today’s topic or anything else related to real estate, please call or email us. We are always willing to help!
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