Inflation. Record high home prices. Low inventory. These are a few factors that have people wondering if a real estate market crash is coming. According to experts like Dave Ramsey, the housing market is not crashing, so don’t panic!
Will the housing market crash?
Of course, no one can answer this question with 100 percent certainty. However, when you look at the data, Ramsey says, the outlook is more of a slowdown than all-out crash.
Basically, it comes down to supply and demand. The current market conditions are created in a large part by supply and demand.
At the moment, supply is low and demand is high. Thus, creating the seller’s market with those record-high sales prices.
In fact, the average sales price for homes has been increasing since 2019. In 2019, sales prices jumped 18 percent. By 2020, that number was 29 percent.
Locally, June 2022 figures alone illustrate the average sales price for homes is up between 17.6 percent to 23.3 percent.
Higher sales prices and higher mortgage rates combined with low inventory could likely lead to fewer buyers buying into the market.
Hence, real estate transactions may slow down. But again, the housing market is not crashing as of now.
Other supply and demand highlights
Obviously, a driving force in the market is what’s available. In addition to a low “built” inventory, Ramsey points out how new construction has faced struggles of its own since the pandemic.
There are supply issues, fluctuating lumber costs and workforce shortages all contributing to a slower new-build rate. Add lack of existing and new inventory to more people looking for homes and the high-price cycle continues.
Did you know there are about 12 million more households in the United States today than there were in 2007? Clearly, that is a lot of buyers searching for that needle in a haystack.
Summary
To summarize, experts like Dave Ramsey say the housing market is not crashing, and now is as good of time as any to consider your own options. Luckily in our area, we are seeing an increase in inventory at the moment. Connect with a local expert today. Connect with Ryan Roberts. In the meantime, continue to read our blogs for more industry news and highlights.