Here’s why I don’t believe we’re in a housing bubble right now.
The most common question I’ve been hearing lately is, “Are we in a housing bubble?” Today I’m going over a few reasons why we’re not.
Although there are some similarities between this market and the one we saw before the previous market crash, right now we simply have an issue with inventory that has been coming for many years. This is a completely different market from the last bubble and subsequent crash. That was caused by bad loans, which aren’t around these days.
Home inventory is so low that we have a 50-year low on building new construction homes. We are 3.8 million new homes behind schedule.
“Those bad loans from 2008 aren’t around today.”
If you’re here in San Diego, we have a surplus of people moving here that’s further compounding our inventory issues. We have 24,000 people moving here each year, but we’re only building 12,000 new units.
Another factor is that homeowners are staying in their properties longer and building up more equity. We aren’t seeing many defaults anymore, and homeowners have more equity than they ever have. 56% of homeowners have over 50% equity.
All of these reasons point to a much different market than a bubble. This is still a great market to be a home seller in, and low interest rates have made homes very affordable for buyers.
If you have any questions about the market or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
