The Next Bubble?

The Next Bubble?

Over the past few months I’ve heard quite a few comments about the “next real estate bubble” – ranging from nervous to hopeful. Its true, home prices have climbed to reach, and in some cases, surpass 2006-2007 prices. This has many people wondering if we are set up for another real estate crisis.

The good news is that none of the real estate trends and forecasting for 2017 lead me to believe that we are headed for a bubble burst. There are a few important reasons why we’re experiencing a strong real estate market and not headed for doom and gloom.

Rates

Rates have increased twice over the past year but are still at historical lows in the the 3-4% range for 30 year fixed rate mortgages. Its healthy to see small increases that stabilize. Rates are not expected to dramatically increase in the near future.

Lending Guidelines

Lenders are loosening the purse strings – just enough. After the collapse of the real estate market in 2007 many lenders overcorrected their lending guidelines and it was incredibly difficult to qualify for a mortgage. Today, lenders have corrected those guidelines and the result is that there are more programs available to help consumers qualify for mortgages. Lenders have reduced risky lending programs, such as Interest Only, ARM’s, Neg-Am’s, Stated Income/Asset.

Inventory

Everywhere you go, housing inventory is an issue. There just aren’t enough houses on the market. The market collapse in 2007 affected many developers and home builders – many went out of business altogether. Currently, there are less new homes being built than in the years leading up to 2007. Because of the strong housing and rental market people are also holding on to their homes as rentals when they purchase another home.

Its easy to understand the psychology behind the fear of another bubble – many people were deeply affected by the collapse in 2007. However, I feel its important for everyone to know that what we are in is a strong real estate market and not on the verge of another collapse.

For prospective Buyers, the time is now. Buy that house and don’t look back but do plan to live in the home for several years before you turn a profit. You’ll want to take advantage of the current home prices and low rates – both will continue to rise as time goes on.

For prospective Sellers, the time is now. Sell that house – because of low inventory you could receive multiple offers and an incredible price for your home.


  1. Johnnie Zan

    29 March

    Hey, that’s powerful. Thanks for the news.

  2. I simply want to mention I am beginner to blogs and seriously loved this web site. Probably I’m going to bookmark your site . You really have superb articles. Thanks a bunch for revealing your website.

Your email address will not be published. Required fields are marked *