Here’s why we’re not in a real estate bubble.
Home prices across the U.S. are swelling, and many anxious buyers and sellers are worried about a market crash. Today’s market, however, bears little resemblance to the one that led to the crisis of 2008.
Market watchers note that the median sale price was $313,000 in February, which was a 16% increase compared to the year before, but whatever happens at the end of this frenzy likely won’t simulate what happened during the last bubble. Nationwide, homes are selling in about 20 days on average. The average for 30-year fixed mortgages, meanwhile, is still near a record low. Things feel pretty hectic right now, but the market will adjust to a more natural ebb and flow we see in typical market cycles.
Prices aren’t expected to fall anytime soon, and ever since the last market crash, we’ve seen years of continuous underbuilding as far as new construction goes. This is one of the main reasons the country is seeing a housing shortage. According to the National Association of Realtors, home supply is down 28% compared to a year ago. Growing demand and little supply make a perfect combination for rising prices.
Whatever happens at the end of this frenzy likely won’t simulate what happened during the last bubble.
If you’re a seller and you price your home correctly, you’ll likely get a slew of offers. What do you do at that point, though? Hopefully you have a great agent to help you sort through the terms of each offer. Which are paying cash and which are using financing? What are the contingencies of each offer? Are any of them waiving the appraisal or inspection? How do you compare apples to apples and review everything?
There are plenty of great agents out there who can help you, myself included. If you give me a call, I’d be happy to show you what my team and I can do to help you sell your home on your terms and in the time frame you desire.
Also, if you’re interested in entering a raffle to win a Menards gift card, all you have to do is reply to the email that led you to this blog and state your intentions. I’ll announce the winner on my next video, so stay tuned!