What housing bubble?
All you hear, nowadays, when the topic of real estate comes up is about the housing bubble. In my opinion, the very term is nothing more than a device to create fear. When you think of “bubble”, it brings back memories of the stock market crash in the spring of 2000 when everything with a “.com” attached to it seemed to disappear and thousands of people were left with a fraction of what they anticipated for retirement. That’s why I say, “What housing bubble?”
Let’s look at two main facts. First, unemployment is at an almost all time low. If people are working, and they need a place to live, they will be looking for homes. Second, interest rates are at the end of their upswing. Even though interest rates are higher than they were 2 years ago, they are nowhere near as high as they were during the real housing crash in the late 1970’s. Sure, many places in the country have seen a decline in price of housing in the last year, but that was after a sharp spike to all time highs. If you were to take a look at a graph of housing prices over the last 10 years, you would see a steady increase.
Here in Frisco, Texas, the prices of homes have remained relatively flat. One reason is the amount of new homes being built to offset the fast rate of population growth. Many of the people coming here are from the east and west coasts and are buying their homes for cash. It is putting a bit of a strain on pre-owned homes, but not enough to put the housing market in jeopardy.
Therefore, all this talk of a housing bubble is nonsense. If anything, the economy, as well as the housing market will have a soft landing when interest rates start to come back down. Last month it was the price of gas that was playing on people’s fears and sending everyone into a panic. Look at the price of oil and gas today. It makes you wonder what they will think of next.
Let’s look at two main facts. First, unemployment is at an almost all time low. If people are working, and they need a place to live, they will be looking for homes. Second, interest rates are at the end of their upswing. Even though interest rates are higher than they were 2 years ago, they are nowhere near as high as they were during the real housing crash in the late 1970’s. Sure, many places in the country have seen a decline in price of housing in the last year, but that was after a sharp spike to all time highs. If you were to take a look at a graph of housing prices over the last 10 years, you would see a steady increase.
Here in Frisco, Texas, the prices of homes have remained relatively flat. One reason is the amount of new homes being built to offset the fast rate of population growth. Many of the people coming here are from the east and west coasts and are buying their homes for cash. It is putting a bit of a strain on pre-owned homes, but not enough to put the housing market in jeopardy.
Therefore, all this talk of a housing bubble is nonsense. If anything, the economy, as well as the housing market will have a soft landing when interest rates start to come back down. Last month it was the price of gas that was playing on people’s fears and sending everyone into a panic. Look at the price of oil and gas today. It makes you wonder what they will think of next.
posted by FriscoAgent at 1:30 PM
2 Comments:
Well said. Things down south in El Paso aren't much different. As the inventory increases the prices have to come down, no?
Actually I think I read this wrong. Nevermind.
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