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Another Housing Bubble Burst?

I wanted to address the housing bubble… again. I keep hearing people expressing concern about another bubble bursting. Here are a couple articles by Keeping Current Matters, a national real estate market commentator and expert. I enjoy many of their articles as they’re short and reference a recent report most of the time. These two reference New Home Sales and Existing Home Sales. They compare each of them over the last 10 years. One quote they have and I recently heard elsewhere was from Jonathan Smoke, the Chief Economist of He explains the basic difference between 2005 and today:

“The havoc during the last cycle was the result of building too many homes and of speculation fueled by loose credit. That’s the exact opposite of what we have today.”

This is true. Too few buyers buying too many homes with credit that only required a pulse was what drove prices up last time. Now prices are climbing because of the MANY would-be-buyers that are picking between the very few homes available. Builders are trying to keep up, but are nowhere near previous levels yet. But today we have MANY more people living here. Between 2011 and 2015 alone, 4 million new households were created in the US (as in singles moving out of mom and dad’s house, couples getting married, etc). Where are they going to live? Lots of babies being born, that’s why we have the appreciation seen today. Here are the links and Another good quote from these articles is from Trulia’s Chief Economist Ralph McLaughlin. He explains: “Adjusted for population, [new home sales] are at about 63% of their fifty-year average level—way better than 2011, but nowhere near heated.” It’s a great time to buy. Nothing to fear. There’s always the unknown and uncontrollable things. But we need to be brave enough to make the right choice given today’s information and then just adjust as things change. Owning is a tremendous idea. If you already own, buy a second home. If you already own 2, buy investment properties. And call us to help you!

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