Are we in another housing bubble?? When is the market going to tank again………?
That’s the question I hear the most.
First! We are not in a bubble. Not even close to the market in 2006. Back then you could qualify for a home on Stated Income (proof of deposits in your bank acct). That’s gone away and lenders are scrutinizing borrowers credit much more to qualify. There were too many loans handed out in the crash that should have never been, especially with balloon payments scheduled way down the road that the borrowers felt would never come.
Second, during the building boom, at our peak, the county had issued over 3,500 building permits. Last check we saw just over 2,000.
“But Steve, home prices are higher than they have been in a long time.” True! But not because of a bubble. Most homes sold in 2006-2009 are still below what they sold for then. There are only about 3.3 months of inventory of home and anything below 6 months makes it a Sellers Market. Anytime inventory is low, supply and demand come into play.
In our team meeting with our area rep, we crunched the numbers. We are still at the most affordable market in over 50 years. See the attached graph of why I say that. Today!! You can buy more house with your money because of the low-interest rates. Historically low. Even if we go up another 1%, we are still more affordable than in 2006. But remember, for every 1% the interest rates go up, you lose $10,000 in buying power. My first home in the 80’s was near 13%. OUCH!!!
And because the prices have peaked in Southern Utah. If you are a Seller, I don’t see it getting any better than this to Sell now and get in on a really great interest rate.
2017 3rd Quarter Market Report Southern Utah Home