You might’ve heard some buzz lately about a possible recession, and naturally, that can lead to questions about the housing market. Is it stable? Could we see a crash like we did in 2008?
The short answer: The housing market is in a very different place today, and there’s no need to worry about a crash. Here’s why.
1. Demand for Homes Is Still Higher Than Supply
Back in 2008, the market crashed largely because there were too many homes for sale and not enough buyers. But today, we’re experiencing the opposite problem: there are far more people looking to buy than there are homes available.
A balanced housing market typically has around six months’ worth of inventory. Right now, nationally, we only have about 4.2 months’ supply. This means demand continues to outpace supply, which keeps home prices stable or even rising in many areas.
Of course, real estate is very local. Some areas may be more balanced or even have a slight oversupply, but in most markets, the shortage of homes is a significant factor preventing a crash.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
"With the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely."
2. Unemployment Is Low
Unemployment plays a huge role in the housing market. In 2008, unemployment skyrocketed to 8.3%, leaving many people unable to make their mortgage payments, leading to foreclosures and a flood of homes hitting the market.
Today, the situation is much brighter. The current unemployment rate is just 4.1%, significantly lower than the historical average of 5.7%. People are working, making payments, and even entering the market as buyers. This stability helps support the housing market and keeps prices steady.
Today’s Market Is Not 2008
I understand that hearing about economic uncertainty can be unsettling. But it’s important to remember that today’s housing market is much stronger than it was in 2008. The combination of low housing inventory and stable employment creates a market dynamic that is far less vulnerable to a crash.
As Rick Sharga, CEO of CJ Patrick Company, says:
"Literally everything is different about today’s housing market dynamics than the conditions that led to the housing crisis."
Let’s Talk About Your Local Market
While these national trends are encouraging, real estate is local. What’s happening in one market might not reflect what’s going on in another.
If you’re curious about the housing market in your area or you’re wondering if now is the right time to buy or sell, let’s chat! I’m Luisa Armas with eXp Realty, and I’d love to be your trusted resource. Call me at 805-285-3219, and we can discuss your options and how today’s market trends could impact you.
Remember, real estate decisions are about finding what works for you, and I’m here to help every step of the way!
