Some are worried that we are in an ‘06-esque housing bubble and that now may not be the time to buy/sell. What’s actually happening?
Citing industry experts, NAR reports that all signs point to the fact that we are not, in fact, in a housing bubble. They go on to explain that when the larger housing market and the conditions surrounding it are examined, it becomes clear that we are in a very different situation than we were before the ‘06 bubble.
How They Know
As NAR points out, housing prices rose rapidly over the past year, but it is primarily due to lower inventory. They go on to cite experts who suggest that, though prices are rising and buyer activity is very high, “risky” loans are still being issued at a very low rate comparatively: 40% before the ‘06 bubble vs. just 2% now. That alone is enough to reassure them that we are not in a repeat scenario.
What’s That Mean For The Future?
Inventory is still at historic lows. The experts interviewed by NAR state that housing prices are still going to continue to climb, but as housing supply catches up to buyer demand, they will start to increase more slowly than we are currently seeing.
The experts are also clear in stating that they do not envision any immediate scenario where we will see home values fall given the current market and all of the indications that we are not in a housing bubble.
