Let’s clear up a misunderstanding in today’s real estate market about an imminent housing crash. Despite what you may have heard, today’s housing market isn’t like what it was back in 2008. The housing market isn’t going to crash.
From the National Association of Realtors, we know that the supply of homes in different in today’s housing market than it was in 2008. Back in 2008, there were too many homes for sale compared to the number of buyers in the market. There was also a wave of short sales, foreclosures, and overbuilding that put the market into a bubble.
According to the latest data, the unsold inventory sits at just 3.3 months supply at the current sales pace. This is significantly lower compared to month’s supply during the housing market crash of 2008.
Is the housing market going to crash like it did in 2008?
There isn’t enough inventory for the housing market to crash in today’s market. Despite what the media may be telling you, this is the reason why the data shows that the current market isn’t like it was during the crash.
What other key indicators show that today’s market differs from 2008?
- We have a strong labor market today, while the last housing downturn saw, in just a single year, 8 million job losses.
- We are seeing much less risky home loans offered while subprime loans were common during the 2008 housing market bust.
- The rate at which mortgage borrowers were delinquent on their loans was at 10% in 2008 versus 3.6% today.
- We are seeing an historically low foreclosure rate at 0.6% whereas 2008 saw a 4.6% foreclosure rate.
If you have questions about what is happening is today’s housing market, then the Barrington Group Real Estate is here to help. Let’s connect and you can get the answers that you need today.
Don’t forget to like and subscribe to the Barrington Group Real Estate YouTube Channel where you can watch my next episode of Parker is My Town.
Give me a call at 720.244.1308 or email me at Anne@BarringtonGroupRE.com.
