In today's real estate market, we know how difficult it can be to "win" the bidding war for that "perfect for you" home...keep at it. IT IS WORTH THE EFFORT!!Keep in mind the reason that you started
Are we heading into another housing bubble?
Dated: April 27 2022
I've heard quite a few people mention lately that they feel like the housing market is heading into another bubble and they're afraid it's going to "burst" again, like in 2006-2008. While I can understand why the concern, I thought it'd be good to go through the differences between 2006 and 2022 housing markets.
In 2006, there were a ton of foreclosures that flooded the market - that in turn decreased home values drastically. The reasoning behind the number of foreclosures was that many buyers were not actually well qualified to purchase a home (lack of income, too large of a debt to income ratio for examples). Typically they financed with an adjustable rate mortgage (ARM) and when the rate adjusted higher than they could afford, they were foreclosed on. On the flip side of this, many homeowners had equity in their home which they cashed out on by refinancing. When the value of their home decreased due to the number of foreclosures, they were "underwater" - many of these homeowners walked away as well - which lead to even more foreclosures and decreased home values.
Now, the 2022 housing market - how is this different? Today, there is much stricter lending standards that banks use to qualify a buyer for a mortgage. This means that if you qualify for a mortgage, you have been verified on so many different levels with your monthly income, your debt to income ratio, what % do you have available for a down payment are among a few of the financial records that are needed currently. If you have either refinanced or worked on getting qualified for a mortgage in recent years, it can feel like they're asking for so many bank statements and such - yes...they absolutely need that information to be sure that you are as low of a risk as what they feel comfortable lending money to.
The buyer demand is still very high and with listings continuing to be on the low side - there is very little risk of a flood of foreclosures hitting the market again...if a homeowner if having a difficult time to pay their mortgage, they are much more likely to be able to sell and get out of debt now.
The average homeowner gained $55,300 in home equity over the past year alone! That's huge! Even if our housing prices dip slightly (it absolutely could not keep appreciating as fast as it has been in the last 2 years!!) the value will still be there.
Hopefully this makes sense - if not, please feel free to ask questions! If you want more information - let's chat!
With Mike's background in construction/real estate and Becki's marketing experience in the physical therapy world, the two joined forces to create the ultimate team, both in real estate and in their f....
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