With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago.
Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to attain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many markets to overbuild.
Eventually, the excess in new construction and the flooding of the market with distressed properties (foreclosures & short sales), caused by the lack of appropriate lending standards, led to the housing crash.
Where we are today…
1. If we look at lending standards based on theMortgage Credit Availability Indexreleased monthly by theMortgage Bankers Association, we can see that, though standards have become more reasonable over the last few years, they are nowhere near where they were in the early 2000s.
2. If we look at new construction, we can see that builders are not“over building.”Average annual housing starts in the first quarter of this year were not just below numbers recorded in 2002-2006, they are below starts going all the way back to 1980.
3. If we look at home prices, most homes haven’t even returned to prices seen a decade ago.Truliajust released areportthat explained:
“When it comes to the value of individual homes, the U.S. housing market has yet to recover. In fact, just 34.2% of homes nationally have seen their value surpass their pre-recession peak.”
Mortgage lending standards are appropriate, new construction is below what is necessary and home prices haven’t even recovered. It appears fears of a housing bubble are over-exaggerated.
Author:Matt Watson Phone: 214-417-9171 Dated: May 11th 2017 Views: 203 About Matt: ...
View our latest blog posts in your RSS reader. Click here to access.
You're excited about your next big move: You want to buy, build or sell a home in central Dallas, the urban heart of high-style Texas living. But you don't want to fight with paperwork or negotiate details. You just want a real estate agent who can.
I'm Matt Watson. I've worked with young professionals looking for upscale, uptown residences as well as empty-nesters looking to scale down and kick back. I've sold condos, townhouses, lofts, high-rises and homes (historic and otherwise) all over Dallas. And I know how to make your real estate purchase or sale easy and hassle-free.
If you're buying a home, I will:
Help you find a residence that matches your lifestyle.
Give you instant access to the Dallas Multiple Listing Service.
Help you find financing that works.
If you're building a home, I will:
Help you locate the right building site.
Help you select the home style, size and amenities that fit your neighborhood.
Help you select a qualified builder and coordinate construction.
If you're selling a home, I will:
Price your property based on market conditions and your personal goals.
Help you enhance your home's market appeal.
Market your property to the right buyer, not just any buyer.
And whether you're buying a home or selling a home, I will:
Always be your advocate and work in your best interest.
Always give you the facts you need to make the right decisions.
Always negotiate the details and handle the paperwork.
It's that simple. Welcome to the Matt Watson way of doing business.
The #1 Reason to Put Your House on The Market TODAY!The National
"Matt has represented us in 4 different buying and selling occasions. First of all, he sold the unsellable – a condo in Downtown Dallas in a saturated, buyers’ market. That was after going through three realtors prior to meeting Matt. He then helped us sell our next house by being very honest with us in how we should prepare for showings. Matt then helped negotiate our house purchase in Lake Highlands that required some very intricate details in how the seller was to address a few major concerns before closing. Lastly, we listed our house a few years later to only have our house under contract and sold by the FIRST buyer that viewed the house. We would only trust Matt for any and all real estate endeavors."
Jim & Alicia Philips Downtown, Lake Highlands, East Dallas, TX