Housing Bubble? How to know. 2022

Real Estate Agent with https://teamcoker.robertpaul.com 9023635

Housing Bubble? How to know in 2022.

The first place to look is in your own real estate market. Ask the business people who are listing and selling property most often. Holly and I call them the ASR real estate agents and real estate brokers - those who Actually Sell Real estate.

6 Questions to ask your favorite "ASR":
A. Are the numbers of listings increasing?
B. Are there more price reductions happening?
C. Are properties staying on the market longer?
D. Are properties in distress by foreclosure pre-ceedings/processes on the rise?
E. Is average price still increasing?
F. Are you seeing fewer cash transactions?

Why A? Because if the number of listings are increasing, then sellers may not have as much control over pricing as they have up to now.
Why B & C? Price reductions and/or a higher "Days On Market" number can indicate that values are leveling or changing.

Why D? An increase in foreclosures could be a telltale for a changing real estate market. One note is that  there have been many Reverse Mortgages in the past few years which will also show up as foreclosures. These are not necessarily distressed properties, but are instead properties where the owners have now moved out after extracting more value than that current real estate market will return at a sale, so the reverse lender needs to now sell the property for as much as they are able. Many people have been using reverse mortgages to enhance their retirement incomes very effectively.

Why E? Well if prices are leveling or falling, especially for an extended period of time, that is a pretty clear indication that sellers have lost control of pricing.
Why F? Lenders' appraisers affect non-cash buyers' ability to close. Cash buyers are sometimes willing to overlook an appraised value in order to close a purchase. Buyers who are getting financing will be bound by what their lender's appraiser indicates is the value. Appraisers are already conservative and when there are more non-cash buyers than cash buyers, values will have to fall in line with the possibly more conservative appraised values.

Finally, keep in mind that "All Real Estate is Local". Some real estate bubbles have affected some areas and left others less affected. If you need to find an ASR in your local market, send me a text or email, because our Berkshire Hathaway HomeServices Robert Paul Properties referral network is one of the best and one of the most extensive for finding an ASR.

Best wishes, Heath

Posted by

Heath Coker, Associate Broker
Berkshire Hathaway Homeservices Robert Paul Properties
508-548-8888  Licensed in MA
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James Heath Coker | Create Your Badge

Comments (2)

Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH

Thanks for sharing! Its hard to evaluate the trends!

An increase in foreclosures could be a telltale for a changing real estate market. One note is that  there have been many Reverse Mortgages in the past few years which will also show up as foreclosures.

Jun 09, 2022 05:00 AM
Associate Broker Falmouth MA Cape Cod Heath Coker
https://teamcoker.robertpaul.com - Falmouth, MA
Heath Coker Berkshire Hathaway HS Robert Paul Prop

Thanks, Sham. I examine title chains for each property we work on. We are seeing more foreclosures that are based on a reverse mortgage than those that are based on more traditional owner default types.

Jun 10, 2022 04:54 AM