With home prices at record highs and properties, especially in California, flying off the market in just hours, it’s no wonder that the Google search for “when is the housing market going to crash” has spiked dramatically in recent weeks.
Although this present housing mania may remind us of the mid-2000 bubble, experts say there’s no reason to prepare for a crash-landing like in 2008 and 2009. This time the reason is simply a result of supply-and-demand. There are just not enough homes to satisfy all the prospective Buyers out there.
According to Ali Wolf, chief economist at building consultancy Zonda:
“Today’s prices feel unsustainable, today’s frenzy feels unsustainable. But that doesn’t mean there’s going to be a crash. That’s bad news for a lot of shoppers who are hoping for prices to come down.”
He continues with the prediction that over the next year or two, prices will continue to rise, but at a much slower pace. Bidding wars will taper off, and the astronomical offers over asking price will eventually come down, because there is no way the double-digit price growth can continue long term.
We are all aware that today there are far more Buyers than homes for sale. That is another sharp reversal from the late 2000s. Back then, overbuilding yielded far more properties than there were Buyers. Now there isn’t enough new construction to meet the demand.
Probably, the most important factor in the last collapse were the bad mortgages. Thankfully, these have largely disappeared from the market. Today’s Buyers may be paying top dollar, but they have been carefully vetted to ensure they can afford their mortgages.
If you want to get into a new home before prices escalate even more, how about presenting a stronger offer with faster close by taking advantage of a private home loan? Or, if you find you don’t quite qualify for the more rigorous conditions required in a conventional mortgage today, give Sun Pacific Mortgage a call at 707-523-2099 or visit our website at www.sunpacificmortgage.com.
We have helped thousands of Buyers over the past 33 years with our private money real estate loans in California. We even offer owner-occupied home loans.