I google-searched, “is the housing market going to crash” and I was left with a lot of information-overload.
However, this piece of information from Lawrence Yun, posted on his LinkedIn, shared some great insight into the comparisons of the current housing market and the last actual housing crash.
I think so many homebuyers are waiting for “the market to go down”. I hear it when I speak with folks and I cringe, literally.
Let’s look at a few things.
In 2008-2009, home prices went down 30%. The foundation of that market was built on weak “pilings” of absolute crappy mortgages and a very shaky national employment rate.
If you haven’t seen the movie, The Big Short, I highly recommend.
During that period and run-up to 2008, prices had previously skyrocketed from 2003 to 2007 with repeated year-over-year home price increases of as much as 20+%.
During that time, subprime mortgage (mortgages that allowed folks with poor credit, low (or no) down payment and low income/assets) were very common.
Millions of people got mortgage loans that ultimately, should not have gotten them.
Mr. Yun’s article on LinkedIn, does a great comparison of these different markets.
Housing inventory, which is the number of homes/condos for sale, was astronomically high and rose quickly throughout 2008-2012.
We are in the exact opposite situation, where inventory levels still remain low here on Long Island.
Mortgage delinquencies remain much lower than in 2008. So people aren’t losing their homes to foreclosure nearly as much as they were back then.
We do not have the same pressures on the housing market, that we do now.
However, the pressure on the market today is different, coming from the Federal Reserve, raising rates. This may have a very adverse effect on new houses/condos coming to the market in the future – check out my Youtube video on this (especially if you’re “waiting for the market to go down.”)
Call or text if you want to buy or sell a house (631)831-9048.