In the past few decades, we have witnessed a variety of different housing markets. We’ve seen buyers, sellers, and neutral real estate markets, to a wide variety of degrees. There have been periods, when it seemed, every house, sold, as soon as it was listed, at, or above, the listing price, and we have also seen, considerably more challenging circumstances. For the past couple of years, we’ve observed an upwardly, rising, real estate market, with a combination of relatively, low inventory, combined with escalating prices, etc. Is this a trend, a sort of fad, a longer – lasting, new normal, or is there a risk, there will be another bubble, in this industry, and, if so, when might we expect and anticipate it? With that in mind, let’s look at four, possible considerations, which may be an indication, etc.
1. Have prices risen, too quickly?: Prices have certainly, gone up, significantly, in most real estate markets, in the past few years. Have they risen, too quickly, and too much, too soon? Or, is this the new normal? Certainly, the primary causes of this housing market, has been, the relatively, low inventory, of houses, available, for sale, as well, as near, historically low, interest rates. When mortgage rates are low, one is able to purchase more house, for his money, because, the vast majority of home buyers, depend upon a mortgage, for a significant component, of their ability to purchase a house. Will this hot market fizzle – out, or continue, into the foreseeable future?
2. Limited inventory, and low mortgage rates: It seems, we will be witnessing, little rise, in interest rates, in the nearer – term, but, no one has a crystal ball, and, the Federal Reserve, may change direction, if/ when, they deem it the best, for the nation. How long will the limited inventory, prevail, or, will existing homeowners decide, to cash – in, before it’s too late? Smart consumers realize, and recognize, times and circumstances change, but, will these changes, be eased – in, or create another bubble?
3. Will we see a correction?: In the stock market, we often refer to market corrections, when we discuss, prices lowering. Will this also occur, in this housing market? If so, will it be, a minor correction, and shorter – term, or a somewhat longer – term reaction?
4. If so, when?: Will we witness another housing bubble, as we have witnessed, at various times in the past? While history, often, repeats itself, does that mean, it will do so, this time? If so, will it be significant, or merely, a minor, temporary blip?
No one knows, for sure, whether we will experience another housing bubble, and, if so, how severe, or, when, that might occur? Smart consumers, will weigh their specific needs, and priorities, and look at housing, more from a long – term standpoint, than a short – term gamble!