Are we in a bubble? What the heck is a bubble?

Well, 60% of experts believe we are not in a bubble, while 32% believe we are. The other 8% plead the 5th.

A housing bubble is  “is a run-up in housing prices fueled by demand, speculation, and exuberant spending to the point of collapse” and “At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices—and the bubble bursts.” (investopedia)

So, if we’re in a bubble, there would be an inevitable crash. In order to topple down, demand needs to take a dramatic turn downwards and supply needs to sharply increase.

Check out how we measure demand in the housing market - it’s all about the inventory.

And…..this is where the housing inventory is today nationally vs. where we were in the last housing crash

Here’s where we are at locally.

Some experts are saying that we will reach a neutral ground at some point in 2023. 

But for now, while interest rates are increasing, so is the cost of housing -  read that again - Both interest rates and the cost of housing will continue to increase this year. Homes are appreciating at a slower rate, but they are still on the rise as demand is high.

It boils down to supply & demand. You see, there aren’t enough homes for the folks who can afford it. The amount of homes for sale is still significantly lower than the number of people who can afford to purchase them.

So, what does this mean for you? If you are looking to sell, the current demand is working in your favor. That may not be the case a year from now.

Looking to buy? If we aren’t in a bubble that looming crash is not going to happen. Prices will start to normalize,slowly - which could take years. Can your real estate plans wait that long?

With all of this said, a large percentage of our clients are selling and moving south where the cost of living is cheaper. If you’re considering this, we’ve got a huge network of agents that can help you out. You can also search homes nationally on our relocation website, escapenewyorkstate.com

P.S.

One last note, what happened in the crash of 2009 is nothing like what is happening today - not even close. Most of us refer back to it, because that’s what we remember. It’s what we can relate to. We’re not in the same boat. The dirty lending practices were responsible for the crash of 09.

In fact, check out these stats. Our lending practices are no where near what they once were.