Here’s why we’re not in a housing bubble or headed for a crash.
Everyone’s been discussing whether we’re in a housing bubble or not, so today I want to address those concerns.
It’s been about 13 years since the last real estate market crash, so it’s still fairly fresh in our minds. Many of us grew up with it and its aftermath, so we have this constant fear in the back of our minds that it’s only a matter of time before it happens again. Plenty of things we’re currently seeing in the market are adding to those fears. Rapidly increasing prices can be alarming because it may mean a bubble is on the horizon.
However, most experts agree that we’re not in a bubble; we’re in a regular appreciating market. Supply and demand are at work in our market, and we don’t have the underlying factors we had last time that contributed to the crash. These include the subprime mortgage crisis and collateralized debt obligations.
We have more equity in our houses these days as a country than we’ve ever had in the past. Even if someone got into trouble, couldn’t afford their mortgage payments, and had to sell their house, they could still likely sell it and make money or take money out of it. Even with the rental moratorium soon to expire, we’re not expecting any sort of bubble to burst as we head into 2022.
Prices should continue to rise in our area, albeit at a slower rate, which is healthier for the market and will help balance the scales of supply and demand. We’ve seen about 24% appreciation year to date in Wake County, and it can’t continue at that rate.
There’s no need to fear. The average time someone stays in a home is still about 10 years, so if you play the long game, you’ll be safe. Real estate is still an excellent place to invest your money.
If you have any questions about this or real estate in general, give me a call or send an email. I would love to be your real estate resource.