If you’ve recently sold your home or are starting your journey of purchasing a home, you may have noticed that things are a little crazy right now, leaving buyers and sellers alike wondering if we’re in a housing bubble. Prices are higher than ever while inventory is at an all-time low. Most homes are selling in just a matter of days. Plus, if you plan on buying you will most likely be stuck in a bidding war while many sellers are accepting cash offers way over the asking price – sometimes even sight unseen. Things are looking dire for buyers… It’s a tough market, and many are wondering when and if the bubble will burst.
However, some experts say that we are not in a housing bubble, exactly. According to Lawrence Yun, National Association of Realtors chief economist, this is “not a bubble. It is simply a lack of supply.”
So, what we are experiencing is actually reflecting a healthy real estate market. Prices are higher than what we’ve seen in the past not only because of a lack of inventory, but also because new construction homes have decreased due to the pandemic, and we are seeing extremely low mortgage rates. Buyers have also changed their priorities, wanting to move out of larger cities to places where they can spread out and have some land, which provides less options.
Yun predicts that unless a few specific things change like new construction infrastructure, housing prices are likely to remain high and rising for a while yet, mostly affecting home buyers.
If you’re thinking about buying a home, make sure to read our blog What to Expect Buying a Home in 2021.