There’s been some concern lately about another housing market crash. Maybe you’ve read articles linking today’s environment with the Market Meltdown of 2008. Even with the talk of recession, this real estate market is very different and that means that most experts do not expect a crash, just a normal ebb-and-flow slowdown. There are some significant differences in today’s situation:
Loan Qualifying
Heading into the 2008 crash, loans were very easy to find. Almost anyone could qualify for a loan with zero down payment and lower FICO scores. The lending industry was taking huge risks, and this pushed home prices higher, artificially. With stricter lending policies in place, not only do borrowers need to qualify properly, but appraisals are based on true value, avoiding over-inflated prices.
Housing Supply
Another difference is the housing supply. As home prices soared, so did the number of homes for sale. Currently, there is still a shortage of available inventory for the buyers still looking for a new home.
Equity Levels
Another huge difference is near record equity for most homeowners. The strong housing market during the pandemic pushed home values higher than ever before. Contrast this to the Market Meltdown era of short sales and foreclosures, and it’s clear that most sellers can still afford to negotiate and reap a healthy gain in the process.
What this means to you
The bottom line is that if you are a buyer looking to purchase or a seller ready to move, there is no reason to wait or worry that there is a crash on the horizon. The frantic pace of the market has slowed, interest rates have risen, but opportunities are still available in this market.
