Here are a few reasons why a market crash is not forthcoming.
We’ve been enjoying an extremely strong seller’s market for a while now. It’s so strong that many people are wondering if we’re heading toward a market crash like the one we saw in 2008. Though I’m not clairvoyant, I can share a few things that will put your mind at ease about our real estate market.
First of all, 2008’s downturn was largely due to predatory lending practices. People who shouldn’t have been able to secure a mortgage were getting approved anyway. We’re not seeing that now, thanks to policies that were enacted to stop predatory lending practices from reoccurring. For example, the lender can no longer reach out to the appraiser directly, and people have to use cash to make up the difference between the home’s price and appraised value.
"Most people have equity and should be able to get out from under their loans."
Plenty of people are also wondering what will happen when the mortgage moratoriums are lifted. Across the U.S., we’re seeing that around 13% to 15% of FHA loans are considered majorly delinquent after 90 days. However, most people have equity and should be able to get out from under their loans. Also, new home construction is currently booming, and there’s a slew of pent-up demand waiting to be fulfilled. The market is strong right now, but it’s not because of bad practices or factors that would lead to a crash; it’s simply the result of low supply and high demand.
If you have any questions or would like more information about our market or real estate in general, feel free to reach out via phone or email. I’m your eyes on the real estate market.
