2020 Housing Market Insight
Think This Is a Housing Crisis? Think Again.
With all of the unanswered questions caused by COVID-19 and the economic slowdown we’re experiencing across the country today, many are asking if the housing market is in trouble. For those who remember 2008, it's logical to ask that question.
Many of us experienced financial hardships, lost homes, and were out of work during the Great Recession – the recession that started with a housing and mortgage crisis. Today, we face a very different challenge: an external health crisis that has caused a pause in much of the economy and a major shutdown of many parts of the country.
Let’s look at five things we know about today’s housing market that were different in 2008.
When we look at appreciation in the visual below, there’s a big difference between the 6 years prior to the housing crash and the most recent 6-year period of time. Leading up to the crash, we had much higher appreciation in this country than we see today. In fact, the highest level of appreciation most recently is below the lowest level we saw leading up to the crash. Prices have been rising lately, but not at the rate they were climbing back when we had runaway appreciation.
2. Mortgage Credit
The Mortgage Credit Availability Index is a monthly measure by the Mortgage Bankers Association that gauges the level of difficulty to secure a loan. The higher the index, the easier it is to get a loan; the lower the index, the harder. Today we’re nowhere near the levels seen before the housing crash when it was very easy to get approved for a mortgage. After the crash, however, lending standards tightened and have remained that way leading up to today.
3. Number of Homes for Sale
One of the causes of the housing crash in 2008 was an oversupply of homes for sale. Today, as shown in the next image, we see a much different picture. We don’t have enough homes on the market for the number of people who want to buy them. Across the country, we have less than 6 months of inventory, an undersupply of homes available for interested buyers.
4. Use of Home Equity
The chart below shows the difference in how people are accessing the equity in their homes today as compared to 2008. In 2008, consumers were harvesting equity from their homes (through cash-out refinances) and using it to finance their lifestyles. Today, consumers are treating the equity in their homes much more cautiously.
5. Home Equity Today
Today, 53.8% of homes across the country have at least 50% equity. In 2008, homeowners walked away when they owed more than what their homes were worth. With the equity homeowners have now, they’re much less likely to walk away from their homes.
The COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing crisis; today, we face a health crisis. What we know now is that housing is in a much stronger position today than it was in 2008. It is no longer the center of the economic slowdown. Rather, it could be just what helps pull us out of the downturn.
You may be wondering if now is a good time to buy a home ... or if interest rates are projected to rise or fall. I put together a free eGuide for you that will answer many of your questions and likely bring up a few things you haven't even thought about yet. Just click the button below to read it now!
You may be wondering if prices are projected to rise or fall... or how much competition you may be facing in the market. I put together a free eGuide for you that will answer many of your questions and likely bring up a few things you haven't even thought about yet. Just click the button below to read it now!
Save on Your Energy Bill
3 Tips for a Higher Home Appraisal
We had the pleasure for working with one of Coldwell Banker's team member Rosi Agopian. From start to finish she was very responsive, kind, and a constant professional. We got an offer on our first open house ?? & closed escrow in 30-days. I look forward to the opportunity to work with her in the near future.
Rosi is the Best! We met with so many other realtors, somehow we were not impressed by any one of them. Rosi on the other hand, was so caring, attentive, and knowledgable, we connected immediately. She took care of us like a big sister and now we consider her a member of our family. We trust her completely and highly recommend her.
-Russel Jamore, Client
We interviewed several agents before Selling and Buying our house in Sherman Oaks. We chose Rosi. She came with an excellent reputation and lived up to it in every way. We could tell she new both the market and the Real Estate process step by step far better than any of the other agents. She's very attentive and responsive an has enormous knowledge of the market and …
-Felix , Client
To whom it may concern, I went through many of different realtors and ALMOST gave up before finding Rosi Agopian. It's a good thing I didn't give up because Rosi was incredible. It is hard enough trying to purchase a home in Los Angeles let alone find a real estate agent who wants to give you her FULL attention. Rosi was great; she took all of my needs into …
-L Amroyan, Client
“After interviewing several agents, Rosi was the Best! She knows the Market. She is professional, patient, and a pleasure to do business with. Her knowledge, integrity, and honesty in selling our home went beyond our expectations of a realtor. She was always reachable, returned our many phone calls in a timely manner, and consistently assisted us in every step in …
-Ron Coleman, Client