Beth Campbell, 06/05/2022
It seems the most asked question recently by our clients is the prospect of another dreaded “Housing Bubble,” meaning, will my home be worth less than what I paid for it recently in the months or years to come?
Should I Be Worried?
I must confess, I threw away my crystal ball in 2007! However, market conditions right now are very different than during the “Great Recession” of 2007, 2008 & 2009. Lending was available to almost everyone, as long as you had air in your lungs and blood in your veins!
I know this intimately, as my husband and I are self-employed and financing homes for us was based on “stated income, asset verification” loan programs. Three months after we purchased our current home, that ended completely. During those years, inventory was still available and became even more prevalent in the years that followed, due to rampant bank foreclosures.
Today, I personally believe a ‘housing bubble” will NOT happen, as inventory is severely constrained causing fierce competition among buyers out-bidding each other on limited homes for sale. Even with interest rates being raised quickly, instead of having eight offers on a home, we may see four. Instead of seeing offers 10% or 15% above asking price, we’re seeing offers slightly over asking price.
Until supply chain issues and inflation stabilize, and new construction housing starts increase tremendously, inventory or lack thereof is going to dictate prices. Buying a home is a long-term investment. Keeping that investment for 5 years or more should cushion you from ever becoming “upside down” and reap you the benefits of not only having a residence, but also having secured some peace of mind that your investment will continue to grow in value!
Beth Campbell
Broker of Another Listing LLC