There’s been some concern lately about another housing market crash. Maybe you’ve read articles linking today’s environment with the Market Meltdown of 2008. Even with the talk of recession, this real estate market is very different—and most experts do not expect a crash, just a normal ebb-and-flow slowdown.
Here are some significant differences in today’s situation:
Loan Qualifying
Heading into the 2008 crash, loans were very easy to get. Almost anyone could qualify with zero down payment and lower FICO scores. The lending industry was taking huge risks, which artificially pushed home prices higher.
Today, stricter lending policies are in place. Borrowers must qualify properly, and appraisals are based on true value, helping to avoid over-inflated prices.
Housing Supply
Another key difference is the housing supply. Before the 2008 crash, as home prices soared, so did the number of homes for sale.
Currently, there is still a shortage of available inventory for buyers who are actively searching for a home.
Equity Levels
Another major difference is the near-record equity levels for most homeowners. The strong housing market during the pandemic pushed home values higher than ever before.
In contrast, during the Market Meltdown era, short sales and foreclosures were common. Today, most sellers can still negotiate and realize a healthy gain.
What This Means for You
The bottom line is that if you are a buyer looking to purchase or a seller ready to move, there is no reason to wait or fear a crash on the horizon.
While the frantic pace of the market has slowed and interest rates have risen, opportunities are still available in today’s market.
