Is the Housing Market in a Bubble?

Is the Housing Market in a Bubble?


Sell my house omaha,Sell My House In Omaha Fast,14720 grant st,sell my omaha house fast,omaha realty rent,buying homes omaha ne,houses for sale in omaha area,houses for sale 68164,rent a house,rent my house omaha,

Before we answer the question, Is the Housing Market in a Bubble? Let’s define the term: Housing bubble.

A housing bubble is a run-up in housing prices fueled by demand, speculation, and exuberance. Housing bubbles usually start with an increase in demand, in the face of limited supply, which takes a relatively extended period to replenish and increase. Speculators pour money into the market, further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices—and the bubble bursts.

Are We in Another Housing Bubble?

Investopedia has a simplistic answer to the question. “The bursting of the housing bubble precipitated a financial crisis and sent the United States into the worst recession in decades. But as the economy recovered, so did housing prices. According to the U.S. Census Bureau, the average price of a new home sold in March 2009 was $259,800, while the median price was $205,100. In June 2019, the average price of a new home sold was $368,600, and the median price was $310,400. The sharp increase has many people worried we’re in another housing bubble. By definition, if there is a bubble, it will eventually burst. If it doesn’t burst, then it wasn’t a bubble at all.”

Zillow is quoted as reporting, “In a research report in which Zillow polled 100 real estate experts and economists about their predictions for the housing market, it disclosed that nearly half of all survey respondents said the next recession would commence in 2020, with the first quarter of the year cited the most as to when the recession will start. The main culprit for the housing recession: monetary policy.

Is the Housing Market in a Bubble?

Only a fool makes predictions, but there is one thing that worries me. No, not a recession, but the affordability of the average house. We are at a point where a lot of potential buyers don’t earn enough to afford the average house. They seem to be doomed to apartment living.

Affordability

Forbes Magazine said recently, “Affordability is getting worse.

The NAHB/Wells Fargo Housing Opportunity Index shows that the peak of housing affordability was reached in 2012 when 78% of new and existing home sales were affordable for a typical family based on their incomes and current interest rates. By the third quarter of 2018, that score of 78 had plummeted to 56, meaning only 56% of home sales were affordable.

NAHB’s projections show that in 2019 the index is likely to fall below a level of 50.

BuzzFeed News says the situation for renters is also grim.  Since 1960, renters’ incomes have increased by only 5% while rents have risen 61%. Out of over 3,000 counties in the nation, there are only 22 where a full-time worker earning minimum wage can afford a modest one-bedroom rental, and there are no counties where they can afford a modest two-bedroom. Nationally, there are only 37 available and affordable homes for every 100 extremely low-income renter households. When it comes to being able to pay your rent in America, hard work simply isn’t enough anymore.

Is the Housing Market in a Bubble?

IMO, we are not in a bubble. We suffer from a shortage of affordable housing.

FREE information on How to sell your house fast

Styl Properties, Inc. is here to help homeowners out of any distressed situation.  

As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what!  There are no fees, upfront costs, commissions, or anything else.  We offer the simple truth about your home and how we can help you sell it fast.

Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577

Photo by Daniel Hansen on Unsplash

Leave a Reply

Your email address will not be published. Required fields are marked *

Top