09/08/2021
I'm still hearing comments about people waiting for the market crash before buying a home...
We have many experts that believe a crash is unlikely, including NAR Chief Economist, Lawrence Yun. Here are some compelling reasons why many real estate professionals agree.
2008-2010 was quite a different scenario than what we are experiencing today. Back in 2008 lenders were not being as closely governed to ensure good lending practices. Unfortunately, many lenders were funding risky subprime home loans. Government regulators have now changed the ways that banks can lend and they must meet specific guidelines before your mortgage loan can be approved. That means less risky lending, which in turn should mean less defaulting.
Speaking of defaulting... With the market in its current position, many people bought their home during the Buyers Market and paid far less for their home than what it is worth today. That means that many homeowners now have a solid amount of equity in their homes. Rather than defaulting or allowing your home to be foreclosed on, many would be able to sell their homes at a profit and walk away if need be.
Lastly, when the market bubble hit in 2008 we had a surplus of new-build inventory. After the crash, building significantly slowed down and by 2011 those surplus homes were bought up. This slowdown, or underproduction has now led to a housing shortage. This current lack of inventory is why most real estate professionals will tell you that they're not concerned with a sharp decline in the market. Although building is continuing to rise, the shortage is still significant enough to affect our inventory and keep us in a Seller's market.
So should you buy? Well, it looks like lower interest rates are here for a bit longer, although it is projected that they are likely to rise and median home prices are projected to continue going upwards this year and next. That of course leads to the thought that real estate investment is still looking sound. Of course the market is always changing and could throw a curveball, but right now it seems unlikely.