Are we in a Housing Bubble?
The most often questioned being asked today with home prices soaring, multiple offers, and waiver of appraisal contingency is “Are we in a housing bubble? Based on recent reports it appears this cycle is very different from 2004-2006. In 2004-06 demand was partly due to the no-doc loans with short-term fixed rates. Financing essentially was easy to obtain. Almost anyone was able to qualify for a loan even those with low credit scores. This is what created the demand. Unfortunately, these loans are what ultimately caused the housing crash that led to a decline in values with foreclosures and short sales being more prevalent.
Today we are seeing low interest rates allowing many prospective buyers the ability to qualify to purchase a home, creating a demand. Although more stringent guidelines are in place to obtain a home loan as well as many sitting on a lot of equity ready to move either to upsize or downsize. This is a much stronger seller's market than 2006 with inventory still at an all-time low. Experiencing a market crash is highly unlikely. No one can for sure say what will happen in the real estate market, however, many experts believe we will experience a dip but not a crash. As rates increase it is expected that the market will settle down.
If you are thinking of selling and you want to get the most for your home, do it when you know the market is good. Anything can happen and the market can change quickly should something catastrophic happen.
‘Sell Your Place with Lyle and Grace”