2022 Housing Bust – Mild or Severe
The real estate problems we saw back in 2006 are not the same that we’re seeing now, and that makes me concerned, very concerned! For me, the main red flag is the fact bad for each of the past two years, we’ve seen irrational exuberance in the home-buying market that has resulted in 25% per year appreciation! Sure, all real estate professionals and homeowners love to see housing appreciation. But, with over three decades of residential real estate experience I’ve never seen the market appreciate like this for the last 2 years. If I had one word to describe the appreciation that we’ve seen, it would be crazy!
2022 Housing Bust – Mild or Severe?
Appreciation like this, is so out of line, I think the correct terminology should not be appreciation, but speculation! Yes, this move in the housing market for the last two years is reminiscent of the.com era in the stock market, and we all know how that ended!
Data from the US Census Bureau shows that there are 839k Single-Family Homes actively Under Construction. Meanwhile, there were only 511k Annualized Home Sales in July. This is the first time in US History where significantly more homes are being built than sold. A sign that the 2022 Housing Crash is going to get even worse.
In many cities the MLS listing systems are showing inventory is piling up, days on the market is increasing, and perhaps most importantly large percentages of the active listings are showing price reductions. What you should understand is that these price reductions are going to translate interval or actual sales prices once these properties close escrow.
What the general market should understand is that all these news outlets and social media platforms interviewing Real Estate so-called experts or giving you the consensus industry opinion, that it’s only a correction or pull back to a normal market. Or, you might be hearing this is such a great opportunity to buy a home because you don’t have to contend with a lot of other offers that are way over the asking price.
Let’s face it, the real estate industry is a sales industry, so, naturally they’re going to be as optimistic as possible. Even though I’m an active California real estate broker, I am retired and not interested in listing or selling anyone’s property. So, I have no horse in the game so to speak. And it’s my personal opinion, and I do hope that I’m wrong, that this real estate bust he’s going to turn out to be much more severe and what we’ve so around 2006!
Homeowners should understand, that just because you don’t have to sell at any time in the near future, you’re going to escape this downturn. Just like many didn’t sell their homes as prices escalated, yet their homes became worth more because of demand. In today’s market, the same is true, now lower sold prices turn into depreciation for existing homes.
Always keep in mind, that purchasing or selling a home is a major lifestyle decision, and as such, should not be rushed into. So, by all means, if you’re considering purchasing or selling real estate in today’s market, do your own homework and draw your own conclusions! But, also consult with your legal & financial advisors prior to making your moves.
My opinions here are just that, opinions! The fact that I’ve been in the residential real estate market for over three decades, does not mean that my opinions are going to be any more accurate then your mother-in-law’s opinion, though I sure hope they are!
Real Estate Home Sales COLLAPSE
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Interested, call Bob Schwartz (619) 286-5604 for additional information
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