If you've been reading the news lately, it's doomsday for real estate. Mortgage rates are through the roof, inflation is crazy, egg prices are nuts, nobody's buying and the real estate market is about to crash. They're making everybody terrified.
But here's what we know. In the last 53 years, the United States has entered 6 recessions. In those recessions, home prices have dipped once and crashed once. So what's the difference between all these times and where we are now as a country?
Well, to start...precipitating the price crash in 08 inventory levels in the US sky rocketed from 2.5M listings to 4M listings in 07 - one year before the crash. We're currently at....1.1M active listings. The surge isn't there.
In 07/08 some of the key indicators we saw cause the bust were the percentage of people underwater on their mortgages, the high amount of debt and the uptick in foreclosures. All 3 of those indicators are at insanely low levels.
I don't have a magic 8 ball, but the tea leaves don't seem to indicate as bust in my opinion. Feel free to share yours!
- Brendan Burns
