Will This Market Crash?
In my last blog post/letter, I signed off with the following: “Spring is mere moments away, and before you know it, I will be complaining about the heat and humidity…” I wrote that a little over a month ago, and as I sit in my office and look outside, I just see rain and gray and cold. I know that it will pass and the sun will come out and my vitamin D levels will go back up, but geez, none of that is in a hurry. I feel like in Omaha our months need to be recalibrated. This doesn’t feel like we are in the heart of spring, even though it’s May, but we are in the heart of the spring selling season. (Brilliant segue, don’t you think?)
The question that I am getting most often right now about real estate is when is this market going to correct itself, or another version, when will this housing bubble burst. The short answer is: this isn’t a housing bubble that will burst, though it should slow down to more normal equity increases in 2023. Here’s why:
The housing crash of 2008 was largely due to the sub-prime mortgage industry. The industry okayed people with less than stellar credit to get into mortgages with adjustable rates that ultimately would be so expensive, people found themselves in a predicament that gave them no choice but to foreclose. We don’t have those kinds of shady mortgages anymore. People are legitimately qualifying for mortgages with good credit and a pretty stable financial situation. And granted, the future is the future, and no one really knows what will happen. But most real estate analysts agree: this market should stabilize but will not burst.
Secondly, (and this is probably going to sound crazy but stick with me) your house is, above all else, not an investment but your home. It is the place that you get to call your own. You can paint the walls whatever crazy color you like, have whatever pets you want without asking for permission or forgiveness, remodel and update and never finish appreciating it for all of the memories, safety, and comfort that it provides for you. Most people say your home is an investment. And that is true. Real estate has made a lot of people have a stronger investment portfolio, but that will never replace what your home should be to you.
A friend who recently went under contract on her brand new home asked me, “Do you think I’ll regret buying now? That I am going to pay way too much for my house?” And my simple answer is no. Because your home is more than an investment. Will we see another 20% increase in housing this year and the next? No. But we will continue to see our home’s value grow at a more normal pace, most likely yes, which is great. You know why? You get to make money on the place that you get to live. And I think that is pretty great.
The market is still in favor of sellers with a continued limit in inventory, but I have had success with buyers too. Call me if you are curious about your options of buying, buying and selling, or even just selling and using your equity to go on a crazy adventure. (Buy an RV. Explore National Parks.Go off grid.-I’ve thought about this; can you tell:)).
As always, thank you for trusting me with your friends and family. I am honored and humbled by the business that you all have sent me since my move to full time. If you ever have questions about the market conditions or how to become an investor or just want to catch up, please reach out.
Your favorite realtor,