Are we in a housing bubble?
As we get into the middle of the second quarter of 2022, many people ask, "is the market about to crash?"
If you are asking the same, WATCH THIS as a good resource for you.
Over the past three years of the pandemic, the possible factors that could have affected the market, as you probably already know, have increased double digits by 20-30%:
Over the past three years of the pandemic, the possible factors that could have affected the market, as you probably already know, have increased double digits by 20-30%.
Government stimulus
Interest rates
Supply and demand
What has happened to the prices of homes?
The consumer price index says that each type of home, except for the lower price, single-family homes, here in the DMV area suggests that the sellers have the advantage in today's market.
The most significant increases in the index were in the mid and higher-priced single-family homes and the higher price condominium segments. So, there's undoubtedly been gains between 13 and 15% on top of the existing 10% - 12%.
Overall demand was strongest in the highest-priced single-family and condominium segments. And that's where the market is for the most part.
Will there be a bust?
The reality is that the real estate market will probably not bust. What happened in 2007- 2008 is unlikely to happen today.
Why?
Because of what happened in 2007-2008, if you recall, when the market crashed, resulted from poor (or lacking) lending guidelines.
From the early 2000s to 2005, they would have the breath in the mirror test to see if you could get a loan. So if you can breathe and fog up this mirror, guess what, you get a loan. 😁
There was almost no oversight regarding the lending practices.
In 2009, with the Dodd-Frank bill, the government placed oversight into the lending practices that caused the crash of 2008.
Buyer housing demand will remain strong, and the number of actively listed for sale will drop. Unfortunately, buyers will have to work a little harder or wait longer to find their dream homes.
Where will the market go next?
It is impossible to predict the future, but if the past is an indication of the future, I expect that at some point in the near future, buyers will become frustrated with the increased values and the market will cause a cool down.
What else will impact the market?
Interest rates will probably continue to increase, so if you are looking to purchase a home, you may want to consider buying before the interest rates rise.
Is Q2 of 2022 still a good time to buy a home?
If you're ready.
The important thing in buying a home, no matter what is happening in the market, is your finances and if you meet the requirements:
If you have 3 - 6 months of emergency funds for expenses.
Your monthly house payment will be 25% or less of your monthly take-home pay.
You can pay the closing costs upfront.
If you have questions about how I can help you all, please reach out to me: Dan@Greetings virginia.com or you can call me at 703-346-2776.
I know every nook and cranny here in the DMV area and has my own home since 2007.
I would love to be able to answer your questions.
I'll talk to you soon.
If you're interested to learn more about Real Estate Investing or tips and strategies about Real Estate, you can reach me at 703-346-2776 or send me an email at Dan@greetingsvirginia.com. We will be more than happy to help you.
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