The data shows that we’re not headed for another market crash.

Lately, I’ve been getting asked a lot about the real estate market, if we’re in a bubble, when I think it’s going to shift, and whether it’s going to crash. I don’t believe the market is heading for a crash. Here are four reasons why:

1. Stricter loan requirements. Since the Great Recession, which ended in 2012, the underwriting requirements for loans have become much stricter. Any buyer buying a residential property with a mortgage has to show adequate credit, income, reserves for a down payment, and reserves in the bank. The likelihood of default on those loans is very low.

2. Supply and demand. We have more people who want to buy a house right now than there are homes available. That is what’s causing prices to go up and why we’re seeing a continuing seller’s market.

3. We didn’t get here overnight. The population has been growing for years. Millennials are one of the largest groups and are now in their prime home-buying years.

“Low supply and high demand are causing the prices to go up.”

4. New construction has been down for the last 10 years. Not enough homes are being built to keep up with the demand from a growing population.

We will likely see a period where the market will slow down and level out, but the overall supply and demand data show that there are not going to be any dramatic changes in the next 12 to 18 months.

If we can help you buy a house, sell a house, invest in real estate, or if you just want to get an updated evaluation of what your property is worth, please reach out. We’re always happy to help.