Lots of buzz with today’s real estate market boom that -eventually prices are going to crash. But crash might be a little harsh when comparing today to 2006. The wild housing market in 2006 was partially fueled by easy money, variable-rate loans, and extremely low or no down payments. Many closings were followed by a new appraisal with more money borrowed against the to buy “more stuff”. And in 2006 we had an economy thriving on making all the questionable loans and insuring worthless mortgages.
I think it’s safe to predict the current boom won’t last forever. And buyers overpaying today may not be able to sell for a huge profit for several years. Otherwise, the current real estate rush isn’t facing tons of variable mortgages. And our economy is strong.
The good news according to National Association of Realtors chief economist Lawrence Yun, this “is not a bubble. It is simply lack of supply.” The number of listings is down significantly compared to last year- Realtor.com.
Cincinnati numbers below:
The average sale price continues to soar. The number of homes sold is also shockingly high as buyers move to get more space or just escape rising rents. COVID has been a boom for local sales.
It took several years to recoup losses from the 2006 boom. Hopefully, the current prices will level off slowly-probably driven by higher interest rates. In the past new construction help to fill the inventory void but rising lumber and material prices won’t help the average buyer.
Be smart when you’re buying. And lean on your Realtor® for guidance and advice.