No Real Estate Bubble Forming in Lancaster Co. , PA !

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Real Estate Agent with KW Elite
https://activerain.com/droplet/4Vcx

4 Stats That PROVE This Is NOT 2005 All over Again

4 Stats That PROVE This Is NOT 2005 All over Again | MyKCM

Recent research by the National Association of Realtors (NAR) examined certain red flags that caused the housing crisis in 2005, and then compared them to today’s real estate market. Today, we want to concentrate on four of those red flags.

  1. Price to Rent Ratio
  2. Price to Income Ratio
  3. Mortgage Transactions
  4. House Flipping

All four categories were outside historical norms in 2005. Home prices were way above normal ratios when compared to both rents and incomes at the time.

NAR explained that mortgage transactions as a percentage of all home sales were also at a higher percentage:

“Loose credit was one of the main culprits of the housing crisis. Mortgage lending expanded dramatically as unhealthy housing speculation reached its peak and was met by the highest level of credit availability as measured by the Mortgage Bankers Association. The index measures the overall mortgage credit condition by the share of home sales financed by mortgages. This metric does not capture credit quality, but it does set a view of the importance of financing in supporting the housing market.”

House flipping was rampant in 2005. As NAR’s research points out:

“Heightened flipping activity is a clear indication of speculation in the real estate market. A property is considered as a speculative flip if the property is sold twice within 12 months and with positive profit. Flipping is a normal part of a healthy housing market. In an inflated housing market, expectations about short-term profit from pure price appreciation are very high; therefore, the level of flipping activity would show evidence of being heightened.”

Here are the categories with percentages reflecting the unrealistic ratios & numbers of 2005 as compared to the current market. Remember, a negative percentage reflects a positive gain for the market.

4 Stats That PROVE This Is NOT 2005 All over Again | MyKCM

Bottom Line

They say hindsight is 20/20… Today, experts are keeping a close watch on the potential red flags that went unnoticed in 2005.

Email  mikeperrykw@gmail.com  to receive a 25+ page RPR Property Report  on any property in the USA  !
 
Posted by

 

Michael J. Perry

KELLER WILLIAMS Elite

www.lancaster4sale.com  

 

1280 Plaza Blvd. , Lancaster, PA 17601

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Longtime West Lampeter resident and Lancaster County Realtor!

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Don Hess 08/18/2016 03:53 AM
Topic:
Real Estate Market Trends
Location:
Pennsylvania Lancaster County Lancaster West Lampeter Township
Groups:
1st Time Buyers
ABR-Accredited Buyer Representatives
Keller Williams
Keller Williams Realty Referral Group
Advice for Sellers

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Rainmaker
3,270,209
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I see this info from KCM as well...good stuff!  I hope you have a good day!

Aug 18, 2016 12:21 AM #1
Rainmaker
3,984,945
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

There is to much demand for there to be a buble at this point

Aug 18, 2016 06:09 AM #2
Rainmaker
2,706,951
Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Great post Michael J. Perry and I can say there is no bubble here in Dallas.

Aug 18, 2016 11:42 AM #3
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Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

Michael J. Perry Thank you for taking the time to share this.  This is great information for all.  It gives buyers and sellers a better understanding of current market conditions to make informed decisions. Well done!

Aug 18, 2016 10:35 PM #4
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

I saw this too and glad to keep up to date with the predictors for the future market. Of course anything can change.

Aug 18, 2016 11:41 PM #5
Rainmaker
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Just under 400 views !

Mar 12, 2017 10:21 AM #6
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Rainmaker
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Michael J. Perry

Lancaster, PA Relo Specialist
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