Are we really headed for a housing bubble?
Well, if you listen to some of the media outlets you would think it’s right around the corner. I don’t see it happening any time soon and here’s why.
Number one: We’re still in a housing shortage. Even though the inventory has gone from approximately 300 homes for sale (in April of 2021) to approximately 600 homes for sale (in September of 2021) we still don’t have enough inventory to supply the demand. Back in the summer of 2019, the inventory crept up to about 1,600 homes for sale (interest rates went to 5%) and we did see the housing market slow down.
Number two: The builders are still cautious, especially the builders that have been through the past couple of downturns in California. They don’t want to be in the middle of building 3 or 4 phases and then have the rug pulled out from under them again. Plus, the cost of building materials has put some pressure on building as well. So, for now, there probably won’t be any ‘over building’.
Number three: You may have heard that there are a lot of homes that are in ‘forbearance’. This is true. When the COVID lockdown started, the Feds/CDC recommended people to not go to work and to ask their lender to put them on forbearance. Well, that time period has officially, unofficially ended. Some pundits think that because of this, there will be a lot of foreclosures in the near future. I don’t think so. I cannot believe the federal government will tell people to not go to work and not make their house payment and then foreclose on them. I think there will be a similar situation where homeowners that are not able to make their mortgage payment will have an opportunity to either… refinance their existing loan, do a loan modification of some sort or…. something totally new that we haven’t seen before. The government will not force millions of families to go out on the street and become homeless. That just doesn’t make any sense to me. So, if home buyers think the next big foreclosure boom is near, they’re going to have to wait.
Someday there will be a correction. Likely, it will be something we have never seen before. For now, if I had to guess, it will be a combination of rising interest rates and house dumping on the part of the wall street landlords.
If you have any questions regarding this or any other real estate related matter, feel free to call, text, message, or email me, and if you’re thinking about selling or making a real estate move call me, and I’ll show you how to save a few extra Thousand when you do.
Take care and be safe out there.
Sincerely
Ron Hier
P.S. If you know of some that needs to sell a home fast and get the most money out of it, let me know. We have cash buyers that can close quickly.
