58% of Homeowners See a Drop in Home Values Coming
Over half of US homeowners believe there will be a "housing bubble and price correction" between now and mid-2019. That's according to a survey by ValueInsured, a company that sells insurance to homebuyers that reimburses housing downpayments should the market decline. Now, I am not familiar with ValueInsured, and the point of this post is not to encourage you to check out their product. But their "Modern Homebuyer Survey" sure caught my eye. I can certainly understand the concerns potential home buyers and owners have about the rise in housing prices, especially with a still fresh memory of the downturn less than a decade ago. But this market has little in common with the forces of that earlier time frame.
The housing crash was caused by two major factors:
- Unqualified buyers could get easy financing to purchase a home due to lax lending standards.
- Home builders across the country were overbuilt for demand.
As any recent home buyer today can tell you, the factors causing the housing crash 8-9 years ago no longer exist. Available housing inventory is at its lowest point in 20 years, and new construction, despite builder ramp up, is still below historic norms. And getting a mortgage this market, though easing, still remains a task.
Recent increases in home prices are the result of an economic law you probably learned in high school... supply and demand.
Are you one of the 58% of homeowners who are concerned about home values depreciating over the next two years? Perhaps you're hesitant to move up to the home of your dreams. Perhaps you will feel better knowing about Zillow's latest Home Price Expectation Survey.
Each quarter, more than one hundred economists, real estate experts and investment & market strategists are where they see home values going over the next five years. The experts are predicting home prices to continue appreciating through 2021. These 100 experts do expect lower levels of appreciation than we have seen in the last five years, but they do not call for a decrease in values.
If you currently own a home and are thinking of moving-up to the home your family dreams about, don’t let the fear of another housing bubble get in the way. This housing market in no way resembles the market of a decade ago.
Have questions about real estate you want answered? Even if you aren't planning to buy or sell for years, I hope you'll feel comfortable calling me to talk about your unique real estate situation. I'd love the opportunity to become your agent long before you actually need one. -Cindy Allen
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