A lot of people have been asking us whether or not we’re in a housing bubble, whether or not that bubble will burst, and what will happen in our market in the coming months.
First of all, yes, we’re in a strong seller’s market and prices have increased dramatically. This all boils down to supply and demand. Due to low levels of inventory and a high number of buyers, prices are rising. One listing may have 30 eager buyers, and each one is trying to place a higher offer that will beat the competition. Some homes are selling for well above asking price. As a result, home values are rising.
Buyers, we know things can be discouraging right now, but we encourage you not to quit. Keep submitting the best offers you can and find a Realtor who can help you assess what you should offer. Price isn’t the only factor in making a good offer—perhaps the seller wants a quick closing date or they need to stay in the house for a bit after the sale so they have time to move. You can also waive inspection contingencies or other expectations in order to make your offer more attractive.
Many people fear that what happened to our market in 2008 will happen again. They think our market is unsustainable and will inevitably crash. However, this market is very different from the 2008 market for many reasons. For one thing, homeowners have a lot of equity now, which wasn’t the case in 2008. We’re also seeing buyers with a lot of cash, meaning they’re settling with large down payments at closing. This equity should be able to weather any future decline in home prices.
The bottom line is that although it may look like we’re in a housing bubble, we’re simply seeing the effects of supply and demand. If you have questions about this topic or would like to know more about our market, don’t hesitate to reach out to us. We’re happy to help.