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.
I think It will have a crash in 2022, but very light not the Same as 2008-2009.
Problem with buying now is that houses are priced 60 to 80 thousand more than they’re worth. Some even more.
As I look around, I see Homes that should sell for 160k- 180k tops actually selling for over 300k and many need work. I would never do it!. What Am I missing?
Any concern about the effect related to Evergrade ? There are a bunch of banks (164) that are listed like large investor in Evergrade …. could this cause a domino effect on the real estate market ?
My friends bought 27 years ago for $170 thousand. I bought 17 years ago for the same square footage $350…my niece bought the same this year for $590. Time changes and property values will keep rising.
Market is way over priced
Especially for what we call middle class
Crash will definitely occur when this plandemic is supposedly over – if they ever end it
That is when foreclosures will skyrocket and of course rent will go up even more!
People have lot of leftover money as they do not travel to office or they do not go for vacation. Once things get normal, people have other priorities to spend other than the boring houses. This is definitely a bubble ready to burst, want to bet on it?
With the rent and mortgage forbearance ending there will be more homes coming on the market. Renters that have been evicted will find it difficult to rent again because of credit damage, landlords will either have to accept the lower credit rating renters or sell their property. Foreclosures will force sales and if too many hit at once prices will suffer, so there are several problems facing the housing market including more covid.
Inventory is everything to pricing. Check your TP prices over the past 24 months.
FYI, the market crash of 2008 started in late 2005 in Southern California. Slowly, the word got out.
Time to get out
It’s going to be interesting to see what pressure that the rise in interest rates will Do.
A number of buyers will not be qualified with every 1/4 point.
Sometimes I wonder if this is because of international gamblers are playing at their will to buy houses worth 350k back in 2010 at 1m and they keep it holding for 5 years. This is complete failure of policies. The new immigrants come here with what they have and putting that everything in a house and will have to work rest of their life to pay for it. Also does Canada have so many jobs to sustain this this trend? If not, sooner or later 2008 is coming our way, maybe sooner than one can think.
I don’t think this market is crashing or coming down anytime soon. Inventory is low and the stimulus money is floating in the economy. People have way too much money. Buyers are buying with at least 20% down. They is equity in homes and it’s not easy to get a loan unless you are well qualified.
some are hoping and wishing and waiting. And in the interim prices keep on going up. Unless more construction starts happening at reasonable prices. Which is very unlikely unless the government gives incentives for builders to build. I don’t see this inventory crisis resolving anytime soon. Too many buyers who can suddenly buy and have made money with stock market crypto and stimulus.