Many people are worried about how the coronavirus will affect our housing market. I’m sharing five reasons why our market is in better shape than it was during the last housing crisis.
There’s a lot of panic and anxiety going around about the coronavirus and how it’s going to affect our economy and housing market. So I’m sharing five reasons why this economic shift is not comparable to the 2008 housing crisis:
1. Inventory. Between 2006 and 2008, we had an excess of inventory on the market. Right now, we have a shortage of inventory; there are more buyers than sellers. We are continually receiving multiple offers on listings. We have more people wanting homes than houses available to sell them. This means that there is still plenty of demand in our market.
2. Mortgage standards. Before the last housing crisis, mortgages were essentially being given away like candy; almost no research was being done on the people applying for mortgages. Since then, mortgage guidelines have become stricter, and more regulations have been put in place to avoid that.
Before the last housing crisis, mortgages were essentially being given away like candy.
3. Prices are not skyrocketing. While we’ve seen appreciation in our market, we have not seen prices soar. Before the 2008 housing market crash, prices were increasing between 6% and 11%. In our current market, appreciation has been consistent between 4% and 6%, which means it’s been a stable growth.
4. Affordability. Between 2006 and 2008, homes became too expensive. They were 25.4% of a person’s median income, but now they’re closer to 15.5%.
5. Homeowners are equity rich. Due to the consistent appreciation we’ve seen in our market, 90% of homeowners have appreciation and equity in their property. There haven’t been as many people taking out equity lines as in 2008.
As you can see, our current real estate market is in a much different place than it was before the last housing crash.
As always, if you have questions about the real estate market or the coronavirus’s impact on it, or if there’s anything we can do for you or your family, please reach out via phone or email. Also, keep in mind that we’re still providing cash offers on homes if you want or need them. Stay safe!