They are calling it Housing Crash 2019.
“They” are the real estate market experts out there who lean heavily on the negative side.
You may have come across them on the internet.
This gloomy outlook mixed with a wide range of expert viewpoints has many home sellers and buyers feeling uneasy—some believe we are heading toward a repeat of the 2008 housing crash.
However, in my professional opinion, I don’t think things will get that bad. “Housing crash 2019” is a bit too dramatic.
Although the real estate market will probably change and slow down a bit this year, that does not mean anything remotely close to another housing crash coming.
Let me now share with you 4 solid pieces of data that will calm your fears.
Take a look at these four reasons why this so-called Housing Crash 2019 is more hype than reality:
- Housing is More Affordable Now than in 2006
Although affordable housing is still a struggle for many Americans, the data shows that housing is now more affordable than it was between 1985 to 2000. The percentage of your income that a house bill takes up is also much lower than it was in 2006.
2. Lending Standards are Much Tougher
Ten years ago, one of the causes of the “housing bubble” that popped was due to the extremely low lending standards. Remember NINJA Loans? Their motto was “No income, no job, and no assets.” Today they have no business. They are gone.
Another common practice in those days were ARMs (Adjustable Rate Mortgages), that do still exist but only at a fraction of the number that was available back then.
Despite a recent loosening of mortgage standards, we are not even close to the poor standards of ten years ago that contributed to the housing crisis, which means Housing Crash 2019 is not towering over us like some want to portray.
3. Fewer Foreclosures Now Compared to 2006
In 2006, there were over half a million foreclosures. You will be happy to know that in 2018 there only 216,380. 2006 was not a typical level of foreclosures. Although there will never be a year of zero foreclosures, it is good to know that “housing crash 2019” doesn’t come close to the historic level of foreclosures in 2006.
4. The amount of equity in homes today is much greater
Almost half (48%) of today’s homeowners own at minimum 50% equity in your home, which puts them in much better shape than the homeowners of 2006, when many jumped into converting their equity into cash with a cash-out refinance. This wasn’t thought out well and the consequences came back to bite them as they found themselves with homes that were worth less than the mortgage amounts. This led many to simply walk away from their house, which only made the foreclosures rise even higher.
Housing Crash 2019 Looks Greatly Exaggerated
As I said before, the housing market may be entering a rough patch this year. However, those who are trying to paint the picture that today is the same as 2006 are exaggerating. These numbers show that the market is much healthier now than it was right before the crash a decade ago.
Housing crash 2019? Don’t believe the hype.
This is why home sellers and buyers need professional guidance in this age of clickbait and “fake news.”
If you need to find a qualified, professional real estate agent in your area, contact me today. I’m here to help!