When will the housing market crash? This was one of the top three questions people posed on Google this past spring. Why? Because too many buyers have post-traumatic stress from the 2008 meltdown. While it’s fascinating to see how many people still live in fear of that exact scenario happening again, the truth is, we’re not even close to the market crashing!
The 2008 meltdown was an economic crisis, real estate crisis and credit crisis all at once. We don’t even have one of those crises going on right now. Last year after the pandemic hit, as far as I know, I was the first to publicly say that this was not a 2008 scenario. To watch the video and read more about it, visit www.ThisIsNot2008.com.
How was I so sure right at that moment, during the height of the lockdown, that the market wouldn’t crash?
One reason: inventory. Inventory levels were decreasing each week, and for the market to tip over, inventory must increase dramatically. Inventory was excessively low all winter and spring, which led to buyers fighting over properties, multiple-offer situations and cash buyers winning while everyone else was losing.
Once spring came around, everyone thought we’d be stuck with extremely low inventory for a long time. In fact, many were thinking it would be a non-stop frenzy. I knew it would ease up by this summer, and it has. Over the last 60 days, sellers have been coming out of the woodwork and listing their homes.
What are buyers doing? Many are acting like there’s blood in the water and wondering if the market is about to crash.
What are sellers doing? In many cases, they’re not accepting the fact that this shift is happening and are of the mindset that inventory is excessively low like it was last winter and spring.
Here’s the bottom line: we will not see the housing market crash, at least in the next 18 months. Even if inventory lifts a lot more, there are not enough homes for sale. And the number of buyers who didn’t find homes is substantial, so homes will keep getting eaten up. By winter, we will run right back into low inventory. I don’t believe it will be as low as it was last winter, but it will be low—and there will be plenty of bidding wars.
We need to communicate this to buyers by showing them the data, charts and graphs from our MLS. If you get them to understand what’s happening and the way the market flows on a seasonal basis, they’ll be dying to buy a property this summer.
At some point, interest rates are going to go up, so if someone scores now while there’s more for sale and interest rates are still low, they’ll do well. Those who wait will end up regretting it and paying more.
Anthony Lamacchia is broker/owner of Lamacchia Realty and Crush It In Real Estate. For more information, visit www.lamacchiarealty.com.
