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The Real Estate Market Is...

Eric Whitener

Eric is the drummer of our band...

Eric is the drummer of our band...

Nov 6 3 minutes read

The Real Estate Market Is... 

I asked and you responded so here is my take on what is happening in the market, why what we are seeing is not a bubble and what you should expect the in the future. 

Now Vs. Then

Today's market is very different then it was during/after the Great Recession of 2008. To start with the mortgage industry has made vast improvements. Today's borrowers are highly qualified and tightly underwritten. But the biggest difference between now and then is Supply and Demand. 

2021 VS 2010

Knox County MLS Stats

Single Family Homes

2021 1000 Active Listings

U Listings

2010 5000 Active Listings

2021 Less Than 1 Month Supply

2010 12 Months Supply

America is short more than 5 million homes, and builders can’t make up the difference. 

CNBC Article.

  • Some 12.3 million American households were formed from January 2012 to June 2021, but just 7 million new single-family homes were built during that time.
  • Single-family home construction is running at the slowest pace since 1995.
  • PulteGroup just lowered its Q3 and full-year guidance for home closings, citing supply chain disruptions.

Why a Wave of Foreclosures Is Not on the Way

With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won’t happen.

Homes Are Still Affordable

Bottom Line: Home prices are expected to increase over the next several years and interest rates are expected to rise resulting in higher housing costs.

Zillow September 2021-September 2022 Home Value & Sale Forecast

  • Zillow expects home values to grow 13.6% between September 2021 and September 2022, and to end 2021 up 19.5% from December 2020.
  • Existing home sales are expected to total 6.04 million in 2021, up 7% from 2020.

Bringing it all together.

IT is totally understandable to fear a housing crash considering most of us vividly remember what happened in 2008. Today's data tells a very different story, low inventory, high demand, and low interest rates have resulted in double digit appreciation. Future expectations show a deceleration of appreciation which is very different than depreciation. 

Potentially over the next year we could see a push toward a more balanced market. This would be a positive giving more options to buyers when it comes to inventory to purchase however it will come at higher cost due to increased home prices and higher interest rates. 

If you have further questions let me know. I would love to hear from you and talk real estate.  It's what we do.

If you have further questions let me know. I would love to hear from you and talk real estate.  It's what we do.

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