The "Housing Bubble"

Today we address "The Housing Bubble" and what it means

Let’s address the “housing bubble” you likely keep hearing about. These rumors started back in 2020 when COVID began. However, they are more clickbait than reality. The current spike in home prices and rush of buyers into the market was caused by several factors including:

1) A lack of new home construction beginning with the 2008 housing crisis is causing record low inventory still today.
2) An increase in buyers looking for homes caused by record-low mortgage rates. 
3) The pandemic causing people to spend more time than ever at home and wishing they were in a new home. 

This year, mortgage rates have increased and will continue to do so. That increase combined with an end to the pandemic will slow down the number of buyers looking for homes. However, the lack of inventory has been on a steady decline for over a decade and must be made up if home prices are ever to decrease with any significance. In 2010 there were 10.5 months of inventory available. Today there is less than 1 month of inventory available meaning that if no new homes were listed, there would be no homes available by May. The housing market will level out a bit this year with fewer buyers looking for homes. However, enough new homes will not be able to be built and sold to make up the current deficit for years to come.  

Without a forecast for increased inventory or lower home prices, the market is a difficult one for buyers. However, NOW is the time to buy because interest rates are quickly rising to the levels of several years ago which will have a major impact on monthly affordability of mortgage payments.  At Sold On Toni, our mission is to empower our clients to make intelligent real estate decisions. That means we won’t give you advice that we ourselves wouldn’t take. Already this year, two of our team members have purchased primary residences and two more are planning to find their next home this year.

We understand that this market is an incredibly difficult one for buyers.  As real estate experts, we work hard on behalf of our buyers to make sure they are putting in offers that help them WIN their next home. This process starts with education. We ask all our buyers to sit down with their Buyer Agent for a Buyer Strategy Session. In a Buyer Strategy Session, buyers learn about the current local real estate market, the process for buying a home, and the options they have for making their offer stand out from the crowd. Please give us a call to learn more about the market and how we can help you navigate it. 

815-315-1110

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