Robin Krieb
Realty Executives Midwest
OMG why are housing prices so high? Is this a sign of an impending crash?
Great questions that I'm here to answer.
First let's delve into why houses are inflating in price. It's the concept of demand outweighing supply (buyers outnumbering sellers). When this happens, prices of homes can go up quite a bit. According to Realtor.com®, "Nationally, median home list prices shot up 17.2% year over year in April."
The good news is the projection that over the next year or two, things will level off (we won't see as many bidding wars). It is still expected that housing prices will continue increasing, but not at the rate they are currently. One contributing factor to this is that as states are opening up and loosening Covid-restrictions, people are beginning to go out more and spend less time in their homes.
Second let's discuss an impending crash. Leading market experts and economists believe this won't happen as it did in 2008. To begin with, back then supply outstripped demand due in part to the overbuilding that took place. More importantly, bad mortgages were quite common. Neither of these two factors are happening currently. In addition, the economy is beginning to improve and forebearance programs have kept many homes from going into foreclosure.
That's good news for those looking to buy or sell real estate!
