Here’s why you don’t need to worry about an impending market crash.
Along with the spring real estate market comes questions from both buyers and sellers about the current market we’re in and if this market could crash like the one in 2007 did. In my opinion, the answer is no. This market isn’t the same environment that led up to the 2007 crash.
Prices are high right now due to simple supply and demand. We have more buyers than homes for sale; competition and demand are very high, which will all translate to higher prices in any industry. However, one of the biggest differences in this market is our lending practices. From 2003 to 2006, lenders were granting loans that shouldn’t have been made.
For example, stated income loans were given when a buyer would simply tell the bank how much money they made, nothing was verified, and they were given a loan. That sounds a bit crazy because it sets people up for failure. Also, lenders were putting people into houses with adjustable-rate mortgages. So the borrower may have been able to make the payment that day, but a year later when the payment was much higher, they weren’t able to make their payments. Those types of sub-standard loans no longer exist.
So yes, prices are high these days, but the people buying properties are qualified to sustain those payments, which is a massive difference between the two markets in question.
Think about this question for a moment: Would you rather buy a home in a market where prices are increasing or decreasing? Your initial answer might be that you want to buy when prices are lower. However, we want our houses to be worth more than what we paid for them. If you were looking for a property last year but didn’t buy, prices are higher today; if you wait even longer, prices will be even higher yet.
If you buy in a buyer’s market when prices are low or falling, your home won’t be worth as much because home values are declining. You want to buy in a market where home values are trending upward. All of this is to say that now is still a wonderful time to buy and sell!
Don’t worry, we have options for all those homeowners out there who are worried about selling and not having anywhere to go afterward. We have options that mean you don’t have to move twice, and you can make an offer on a new house without selling your current one first.
Call or email us if you’re ready to begin the process of selling your property or buying one. We have you covered either way. We would love to be your real estate experts!