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Is the Market About To Crash?

Here’s why you don’t have to worry about a market crash anytime soon. 

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Are we heading into another housing crash like 2007? I receive this question from clients all the time. This market may feel similar to that one due to rising prices, but there are a few major factors that make our market very different from 2007’s. 

Housing crashes are very rare throughout history, so it takes an extreme set of circumstances for one to occur. In 2007, loose lending practices meant that practically anyone could get a loan, even if they couldn’t afford it. When prices fell, many homeowners had no equity in their homes, so they had to go into foreclosure. This flooded the market with cheap inventory and brought prices down even further. 

Today homeowners’ equity is at an all-time high. New home construction has lagged behind, is more expensive, and is focused on higher-end homes, so it will take a long time for supply and demand to balance. Meanwhile, many buyers are paying in cash or are properly qualified for their loans. Given these factors, our market will remain strong for a long time. 

If you have questions about today’s topic or anything else, please call or email me. I am always willing to help!

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