Google searches of “housing crash” have increased 2450% recently! In fact, since the post-crash economic recovery around 2012 & 2013, many people have been concerned about another crash, yet home prices continue to go up. Buy why?Verify my mortgage eligibility (Dec 3rd, 2023)
Well, in the last few years, millennials have started to come to an age where they can afford to buy a house and they’ve started to seriously pay down debt. In addition, they have two incomes that are likely much larger than their parents when they bought a house.
What this means is they can afford to spend more than their parents may have been willing to pay. It also means they want the best not only in terms of housing wise, but location as well. Millennials want the schools, the neighborhoods, the family-friendly environment they grew up with. And they’re willing to pay top dollar for it.
As for baby boomers, they’re staying put, aging in place. For every year they stay in their house, that’s more money they can put into their pockets for retirement. So who would blame them? Rather than downsizing as they planned to do, they’re holding on.Verify my mortgage eligibility (Dec 3rd, 2023)
But many now worry the housing bubble might burst. Well guess what: it won’t. It comes down to inventory, simple supply and demand economics.
Since many are still working, they are staying in their home and not selling until they retire. This has created a lack of inventory for millennials to buy. So, when a house comes up on the market that a millennial wants, it’s gone almost immediately.
What about the pandemic?Verify my mortgage eligibility (Dec 3rd, 2023)
Some people think the pandemic is to blame, but it’s completely unrelated. Houses are coming on the market at a faster than normal pace because of the increase in housing prices. Whether there’s a virus or not, people still need to move for jobs, downsize their homes, find more space for their families. All of this is unrelated to the virus.
And it’s not like real estate agencies have closed up shop. While there are some ways to manage open houses that weren’t in existence before, like the rest of the world real estate adapted. So again, when the pandemic ends, there won’t be a sudden drop in housing prices.
What’s the bottom line?
Just be prepared! Don’t wait for a housing bubble to burst. Don’t buy or sell if you’re not financially ready, just because you want top dollar. Don’t ever stretch yourself too thin. You’re going to have to be ready for a new market that will not burst, but could eventually just slow down.Show me today's rate (Dec 3rd, 2023)