Is Another Housing Bubble Coming?

Filed under: Temecula Real Estate

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Timing matters in real estate because the state of the economy can impact the price that you will get when you sell your home. One question that I have heard from many clients is about the anticipated trends in the real estate market. Are the prices at their high, so it is a good time to sell before things start dropping again?

Motivations for Selling Your Home

What are the reasons that you want to sell your home? If you are thinking about selling just because we are at the top of the market, then I suggest that you hold off and reconsider your decision. This factor isn’t strong enough on its own for making a big life change such as selling your home. You might consider other factors as well to decide if moving is the best course of action for your family.

Evidence to Show Why We aren’t at the Top of the Market

Here are a few reasons that tell me that we aren’t quite at the top of a real estate bubble:

  1. Financing: The mortgage options today are very stringent compared to financing in the past. These changes have equalized the amount of home value compared with purchasing power. Buyers have to show tax returns, pay stubs, and a full credit report, making it harder to get financing. Lenders are also making sure that buyers are paying at least a little bit towards their mortgage each month, which means that people aren’t upside down in their financing as they were eight years ago.
  2. All-Time Housing Prices High: Even though housing prices have been going up, we haven’t yet reached the all-time high that has been hit in the past. This high was set around 2006 and 2007, and we are still about 20% away from those prices.

Real Estate Trends to Expect

So, what will happen in the future? Anytime there has been growth as we have experienced, there will be a period of consolidation. It is possible that the prices might start to trend down a little bit, and then start trending up again. My estimate is that we will float along with inflation, which is around 3 – 4 %, for the next few years.

Do you have any questions about real estate trends in Temecula? I am here to help! Call, text, or email me anytime for more information: (951) 473-0390 or [email protected]