Are we in a Housing Bubble?

What exactly is a Housing Bubble?

“A housing bubble, or real estate bubble, is a run-up in housing prices fueled by demand, speculation, and exuberant spending to the point of collapse. Housing bubbles usually start with an increase in demand, in the face of limited supply, which takes a relatively extended period to replenish and increase. Speculators pour money into the market, further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices—and the bubble bursts.” – says see article

So the question is -with inventory low and prices soaring higher, are we in a housing bubble?

It’s a good question, but according to National Association of Realtors chief economist Lawrence Yun, this “is not a bubble. It is simply a lack of supply.”

Currently, buyers motivated by a variety of factors, including low mortgage rates, a pandemic-era construction slowdown and a growing desire for more space as people work and learn from home. On the flip side, some sellers are holding off on putting their homes on the market until after the pandemic.

Yun says that there is reason to be optimistic. Even if we were in a housing bubble, not all bubbles burst. Unlike 2008, lending standards are tight, making it hard to buy a house you can’t afford.

To all my buyers: please don’t be discouraged! I know the market might seem insane (it is!), but with a little patience and some creativity, I’ll help you create that successful bid and get to closing day!

Hi there! How can I help?

I’m here for all your real estate needs and questions.

Have a question? Call or text me at 310-529-4292

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