Clients often ask if the market is going to crash because we are in such an aggressive seller’s market where home values are rising at a rapid clip. Many are concerned about whether or not these trends will continue, thinking that we may be in for something similar to the housing crash of 2008. In short, we’re not in a housing bubble, and the market isn’t on course to crash. To explain, let’s compare our current market to the one we saw back in 2008:
Back then, lenders were allowed to give mortgages to buyers who shouldn’t have qualified for a mortgage. Often, those loans had balloon payments or were interest-only loans. Today, the qualification process has much stricter guidelines and fewer loan programs for buyers to choose from.
“There just isn’t any strong indication that our market is going to crash.”
We also had much more inventory in 2008 and fewer people were relocating to Arizona. Roughly 250 people move here every day. Couple that with the fact that we only have 4,300 homes for sale, and you can see why demand is currently so strong. Additionally, homeowners today have more equity in their homes compared to back in 2008. One reason for that is now buyers are required to have a lower debt-to-income ratio when qualifying for a mortgage.
Our economy is expected to continue to grow 5.3% this year, and even if it does slow a bit as interest rates rise, there just isn’t any strong indication that our market is going to crash.
If you have any questions or would like to know your equity position in today’s market, feel free to reach out to me. I’d love to help you.
