When is the Housing Market going to Crash

Dated: April 24 2021

Views: 68

Trending on Google Search right now is this "When is the Housing Market going to Crash" Well, geez, no wonder the country is feeling a bit cranky. 

According to google trends the search for - Housing Market Crash 2021 is up 4,650% nationwide over the same time last year. 

Well, DUH...I am sure last year the trending search on Google is was something like, "Things to do while quarantined" or "new recipes" or something along those lines, consumers weren't thinking about the housing market crashing.

I don't have a crystal ball. I have received multiple calls and texts in the past week asking my honest opinion of what is going on in the market.  My opinion is always honest, I wouldn't serve you any other way. Interestingly enough, that Google Search trend is highest on the West Coast of the US, not in Florida. 

I can only share the facts that I have at hand, I am not one for speculation, I like data.There is a shortage of homes, not just in Florida, but nation wide. Factors that contribute to this are:

-Historically low interest rates, which are currently rising, however are still historically low.

-Shortage of inventory, Nationwide, housing inventory was at a record-low 1.03 million units at the end of February, down 29.5 percent from a year earlier, a record decline, according to the National Association of Realtors. 

You know I love to quote the experts, Lawrence Yun, Chief Economist for the National Association of Realtors stated that “It gives the feel of a bubble,” recalling the run-up to the subprime mortgage crisis that cratered prices after 2008. “But the fundamental factors are different.”

Unlike the last major housing crisis, in which sale prices plummeted which left homeowners stuck with mortgages substantially higher than home values,  as well as risky, adjustable-rate financing presently the factors are very different.  Currently the average 30-year fixed-rate mortgage interest rate remains near record lows, lenders rely on stricter underwriting requirements, to put in laymen's terms those stricter requirements include, but are by no means limited to higher credit scores, debt to income ratio, and job history. One of my preferred lenders recently shared with me that Another Change to lending was this:   OPEN-ended 30-Day Accounts can no longer us 5% for qualifying so for example Borrower has $7000 American Express, they must qualify with $7000 month payment OR have the assets to pay off the card plus their down payment, closing cost and any reverse that are required. Holy Schnikes 

Don't let the hype deter you from still looking for a home if you qualify, just know, it may take a bit more time and a very strong offer.

In my little town of Land O Lakes Florida for the past 30 days, the homes that have sold have sold at an average of 1% over asking price. So, for example, if a home is listed at $300,000 it would sell for $303,000. Not the stories of the $50,000-$70,000 over asking price. Now, that is happening, it happened with my last listing, however, the statistics are showing that is the exception, not the rule. Home Condition, Staging, Photos all played a role in that.

How long this is going to last will depend on interest rates and tight inventory.

If you are a buyer or a buyers agent, keep in mind your current budget and circumstances, if it does not make sense for you to bid $10,000 over asking price, don't do it. As an empath, It is heartbreaking. Buyers are in quite the predicament right now, not only do they need to "fall in love" with a new home in 60 seconds flat, then they need to consider how much they are willing to drain their savings in order to then "win" that home. It is true, there are buyers moving from one market to another where "appraised value" and "comps" mean nothing to them. The only piece of advice that I can provide is this, keep at it, you will get a win eventually.

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Linda Urban

Local Realtor specializing in connecting, connecting with buyers and sellers and connecting them with their next home. Utilizing the latest technologies and innovations including Virtual staging, twil....

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