Why our market won’t crash, even if we get a bunch of foreclosures.
Is our market going to crash? Will we see a wave of foreclosure? Is this all a repeat of 2008? We get these questions all the time, but don’t worry—the answer to all three is no.
We will see a shift in our market, but we won’t have a sudden change in inventory. The banks stopped foreclosing on homes at the start of the COVID pandemic, and they’ve recently extended that policy another year. There’s now a two-year backlog of foreclosures, which the banks will start releasing bit by bit soon.
However, even if all those foreclosures hit the market, it wouldn’t be enough to level out everything. A few things happened over the years that created a low home inventory. Builders haven’t had readily available supplies since the pandemic and can’t build homes quickly enough. Also, a lot of buyers are relocating between states.
On top of that, millennials are now the largest home-buying demographic. More millennials are in positions to buy homes now than there were Gen Xers during their peak buying years. As if all this wasn’t enough, institutional buyers have purchased almost 28% of all homes on the market in the last 12 to 18 months. Almost one in every four went to a company instead of a buyer.
With all these factors coming into play, it’s no wonder why we have a shortage. Our inventory will steadily increase, but it will take around four to five years to reach a balanced market. If you’re looking to sell, now is a great time. It’s less hectic, but you can still get a great price for your house.
If you have any other questions, feel free to call or email us. We’d love to help you understand this market better.