Are We Headed for a Housing Crash in 2022?
77% of people are worried about there being a housing bubble right now, and naturally, because we all remember 2008, they’re worried about it bursting. Could they be right? Let’s look at what we know.
Hi, I’m Kristi Roberts. Listen, if this question has crossed your mind once or twice (or maybe more), I understand. 2008-2010 was not a fun time. But are we really seeing any signs of a housing bubble right now, or are we just getting anxious seeing the market get more difficult?
Home prices are still going up, as they’re going to continue to do. But the most obvious difference here from when the market crashed in 2008 is simply supply and demand. Leading up to that crash, we were very much in a buyers’ market. There were way too many homes on the market for how many people were looking to buy them.
Now if you flip that upside down, you get today’s market, where there’s more people who want to buy homes than there are homes to buy. So that’s the number one difference: today’s inventory is in a wildly different place. The market is basically the opposite of what it was. It’s tough, and it comes with its own challenges, but it’s not something that’s about to burst. It’s harder to get into a house, and we just have to know how to overcome these challenges on a personal and individual level and be able to navigate through it.
Also, part of the reason for the ‘08 crash was that a lot of people were borrowing more money than they could really afford to, and since then, lending standards have gotten MUCH tighter. So if you happen to get approved for maybe less than you were hoping to, that’s actually kind of a reason to feel good about the whole state of things, because that right there is living evidence of why we’re not headed for a crash.
And one last thing, just to show you why it’s STILL a good time to buy, even though the home prices aren’t exactly getting prettier. And trust me, I do it too, I look at houses on the market and go “ugh, really? That’s that much?” But that’s how the market is. And here’s why it’s still worth it:
The net worth of a typical homeowner compared to a renter is about 40 times higher. Let that sink in for a second. Even though the prices keep getting higher, homeowners have ridiculous equity right now, and it’s not too late to jump on that train and ride it up from here. Look at how much homes have appreciated in the last year…5 years… and 30 years. The fact that it’s getting more expensive is the same reason it’s a good investment:
So where 2007 was like a bubble getting bigger and bigger until it popped, 2022 is more like a jungle full of thick vegetation that you have to chop your way through with a machete. There’s nothing to pop, and once you get where you’re going, you’re gonna be fine. It’s a fundamentally different situation.
I hope this helped to ease your mind, and if you want to stay up to date on the current happenings in the real estate market, give us a follow, or a subscribe, depending on where you’re watching this, and I’ll see you for more.