This will absolutely crash. Remember history.
It’ll give me no satisfaction to say I Told You So. Because being right means a lot of pain for a lot of people.
Kind of amazing that you think just because it hasn’t happened YET means it’s never happening.
But ok.
Why do you believe the market will absolutely crash? What is this based on?
I think the “doom and gloom” belief is over exaggerated. The market will dip for sure, but crash? Not likely.
- Less than 5% of the mortgages in the market are considered “high risk”.
- Compare this to 2006/07 where that number was closer to 50%.
- Contrary to popular belief, banks/lien holders have little desire to foreclose on properties. That isn’t their business model and how they make profit. They do not want the properties. They want the interest from the mortgage payments. That’s how banks get paid.
- In fact, a lot of banks suffered when the market crashed the last time due to the large number of properties they had to hold. That costs banks money.
- The percentage of foreclosures across the country has not seen a significant increase for almost a decade.
- In GA, where I am, the foreclosure market has been more or less nonexistent for 7+ years.
- There is also a huge misconception that if the percentage of foreclosures increases that will lead to cut price deals.
- The reality is that the few foreclosures you find in the market currently are selling for at/around market value.
- This is due to low inventory nationwide. Simple supply and demand principles.
- There are not enough homes/inventory on the market to meet the current demand.
- In Atlanta, currently, there is about a 2.5 month supply of inventory.
- For context, a balanced market would be roughly 6-7 months worth of inventory. Buyers market would be 9+ months of inventory.
- the shift required to lead to a buyers market and a subsequent crash would require hundreds of thousands of homeowners to sell at one time (willingly or by force). It simply isn’t going to happen.
Current interest rates are in line with what they were in the early 2000’s. There was a day and time where rates in this country were comfortably over 10% (few decades ago).
6-7% isn’t as astronomical as some make it out to be. 4-5% rates have never been the norm or standard. The 2-3% rates could prove to be a once in a lifetime occurrence. That’s why the market went crazy. Buyers realized that was the time to buy more house for less money. That ship has now sailed.
Anyone sitting on the sidelines waiting for those rates to return or for the market to crash so that they can get a $1 million dollar house for $250k will be dreaming for a long time.
waiting on that
