In my weekly newsletter a couple of weeks ago I included a poll for my readers. I asked "Where do you think the market is going?" Here are the results.
A - Too the Moon 16.7%
B - We are in a bubble. It's going to crash 83.7%
C- Who knows 0.0%
This was hardly a scientific survey. There are a bunch of pessimists out there though, or it could just be wishful thinking for a lot of you. I am not a cheerleader for higher real estate prices. I do like that I am gaining equity in my own home. But, In my 15 years in the business this is the hardest market I have had to deal with. You know something, cheap real estate is easy to sell. Expensive real estate is much harder.
Here is what I think will happen. Conditions, as they are, will continue for a while. Inventory will remain low and probably continue to shrink even more. Therefore prices will still go up. Some kind of event will take place. Who knows what or when. Then everyone who had a mind to do so, will put their home on the market at the same time. We have been dealing with pent up buyer demand for almost a year. What is coming next is pent up seller demand.
Inventory is so low the market can absorb a lot of it. We could triple the number of listings today and still be in a sellers market. So it may not mean a decline in values or even worse, a crash. I don't think we will have a foreclosure crisis like we saw in 2008 either. Homeowners that haven't been able to make their payments and have been in forbearance have seen their equity move significantly higher over the past 15 months. Total real estate equity in this country is at an all time high. Some of those people in forbearance will have to sell eventually. However, they will be able to afford to sell and will likely walk away with money this time.
What do you think?
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