Here is what key market indicators have to say about its future.

Recently, a lot of clients have asked me if we’re in a real estate bubble. The market continues to be hot, and some people are worried it’s just a matter of time before the bottom falls out of it.

Based on key market indicators, I can safely say that we are not in a bubble. Every statistic points toward continued growth. One important indicator is the Case-Shiller index. This index tells us what’s coming up based on shifts in supply and demand. Right now, it doesn’t look like either will change anytime soon. 

One of the biggest causes of our last crash in 2008 was artificial demand. Banks were giving loans to people who couldn’t afford them to drive up home sales. When people couldn’t afford their interest payments, foreclosures flooded the market, and home prices plummeted. 

“Our market is hot because supply is extremely low and demand is high.”

On the other hand, the factors affecting our market are organic. Demand is high due to our great interest rates and the effects of the pandemic. Now that many people have the opportunity to work from home, they are moving away from job centers and toward more desirable areas. 

To complement our high demand, we have very low supply. We have not seen an increase in the number of homes entering the market, so our low supply is likely to continue for a while. On top of that, inflation is driving up the price of everything, including real estate. That means homes are likely to appreciate for the foreseeable future. 

If you are thinking of buying a home soon, I suggest you act fast. Interest rates remain low, but they could change at any moment. They have a stronger impact on your buying power than home prices do, so take advantage of them while you can. 

If you have any questions about today’s blog, please reach out to me via phone or email. I am always willing to help.