How many times have you heard this phrase? How many times have you heard that America is in a housing bubble, or that the “market shift is just around the corner.” Even better, how many real estate agents post about how “waiting to purchase your next home could cost you.”? How much truth is there to these statements, and how do we verify what we actually interpret as the truth? Let’s find out.
Are we in a housing bubble? My thought is…no. With that being said, I do not believe that we are in a healthy or sustainable housing market. While having been able to adapt to this climate and see some of my best years in the industry, I believe that 2022 will be the year forecasters predicted as 2020. What do I mean by this – I think that we are in for a wild spring, and a mild summer/fall. Throughout this article are a few graphs from one of my main resources for information, Keeping Current Matters. These illustrate why some market experts believe we are NOT in a housing bubble.
For the greater RVA area, home prices have trended upwards every month in 2022. While the number of offers might be lower per house that comes to market, there is still enough buying interest and low inventory that is responsible for this uptick. Contrary to forecasters beliefs, interest rate hikes have not had the impact (yet) that was believed to shy back on buyer demand. How many people do you know that are prepared to enter the housing market on paper, but have shied back based on uncertainty as a whole? I can make a killing for my house, but where would I go?
The market shift is just around the corner. Anyone who boasts in an exact date probably has not been in the real estate industry very long! Nothing is certain, and claiming that it is can come across as arrogant or forceful to your clients. What so many in the real estate industry must remember is that we exist to serve our clients on their timeline. Strictly my opinion, but I believe that the vast majority of the population is more inclined to make a decision to enter the market as a buyer or seller once their own thoughts/timeline have been confirmed by a real estate professional’s education. The purpose of educating is not to force someone into a capitalist venture in the market, even though that does happen! In reality, any consumer seeks the truth, either to verify what they know to be true, or to shift their mindset in such a way that makes them feel confident in their own conscious decision. No hard sell, no pressure, just offering information (education) for FREE in exchange for being their person when the time is right. Paying it forward.
To rephrase this blog post’s title, are we in a housing bubble that is similar to 2008? I do not believe so. What I do believe is that the real estate market is not different from life itself. It comes in cycles. This is healthy, this is normal. Part of market cycles are high sales prices, low interest rates, competitive offers. On the flip side, stagnant or expired listings, lowball offers, and extended time on market are also part of market cycles. When will we see more of these? Only time will tell, but we may just be trending in that direction.