It's Not a Housing Bubble - It's a Lack of Supply
In a recent article, Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), discussed the state of today’s housing market.
When addressing whether or not today’s high buyer competition and rising home prices are evidence of a housing bubble, Yun said that this “is not a bubble. It is simply lack of supply.”
In fact, according to the same article, “America has a record-low number of homes available for sale — just 1.03 million, according to the latest NAR data. That compares to a peak of more than 4 million at the height of the last housing bubble, in July 2007.”
Additionally. “The total number of active listings this week is down a record 54% from the same week a year ago, per Realtor.com. That in turn has helped to drive national prices up 17.2% over last year.
There are many reasons why this market is completely different than 2008.
Supply is limited - Record low inventory has been consistent for a while, and shows no signs of changing anytime soon.
Demand is real. There are far more buyers than sellers, due to a variety of reasons. Low interest rates, low inventory, the pandemic, population growth and high new construction costs all are contribute to his dynamic.
Homeowners have plenty of equity. The average homeowner gained over $26,000 in equity in their home in 2020. This means that homeowners are more cushioned from default.
Mortgage standards are very different (must stricter) than they were in 2008. These more stringent regulations will help protect us from a housing crash.
Housing experts are predicting that as inventory increases, appreciation will slow down, and possibly even dip, but most do not think a crash is likely.
The Boulder Colorado Real Estate Market is no exception. The number of homes for sale in areas throughout Boulder County like Louisville, Lafayette, and Superior are at an all-time low. The Boulder area is an incredible place to live, and we do not think that demand for homes for sale in Boulder County will go down anytime soon.
Today’s housing market is healthy, and rising prices are driven by real buyer demand. Let’s connect to talk about the best ways to navigate such an energetic market.