Is the housing market going to crash like it did back in 2008? Today I’ll discuss what’s going on in the market and why you shouldn’t worry about history repeating itself.
One of the contributing factors of the last housing crash was irresponsible lending practices. Buyers were being approved for loans they couldn’t afford. When the market shifted, they were left upside down on their mortgages. In today’s market, however, a majority of buyers are paying in cash—60% of them. The additional 40% of buyers who are getting financing are putting up to 30% down. Given that, I don’t think we’re on the verge of a crash.
So what’s going on in the market right now? Our market may not be as hot as in 2021, but it’s still strong. Recently, we listed six or seven homes; four of them went under contract within seven days, and every one of them received multiple offers.
“Our market may not be as hot as in 2021, but it’s still strong”
For example, one property was listed on a Thursday, and it went live on Friday. We had 13 or 14 showings within the first two days, and after receiving four offers, we had our highest and best offer by Monday at 5 p.m. At this same time last year, we probably would have had somewhere around 10 offers. Even still, the property was listed for $699,000, but it eventually sold for well above $700,000. Homes that are listed properly often receive 5% to 7% above list price.
As long as supply remains low and buyer demand remains high, the market will continue to be strong. Right now is a great time to act, especially for buyers—since interest rates are on the rise, home affordability will only decrease as the year moves along. If you’re only looking to flip the home you buy in a couple of years, now isn’t the time to buy, but if you plan to stay there for the long term, it’s a great investment. Values will only continue to rise over time.
If you’re looking to buy a home or you have any questions about the market, don’t hesitate to call or email us. We’d love to help you.