Real Estate Market - Bubble or No Bubble

By
Real Estate Agent with Coldwell Banker Residential Brokerage MD RE License 579412

Real Estate Market - Bubble or No Bubble

I often get asked about the market and about things people hear and read in the news.  Over the weekend my friend Nic asked this:

Can someone please explain to me all of the news and speculation about a housing bubble and how it relates to an ordinary person?
If I hear a housing bubble is coming am I supposed to sell my house put all my things in storage and go live in a rental for a year or two and then buy at the bottom?
Am I supposed to burn money on rent for a year and try to time the market?
You don't day trade your house. You buy a house to live in for supposedly at least 5 years.
And having lived through all at least three or four housing bubbles if you go back to the 80s.
The only thing I come away with is saying that I should have bought at the bottom of each one.
Someone, please explain
 
There is always speculation about the housing market. I have been involved in the real estate market for 37 years in England, Canada, and now here. I have been licensed in Maryland since 2003. I remember 18% interest in the 80's. Homes were still selling but people got creative and assumable mortgages became popular amongst sellers as a way of selling their homes and letting the new owner assume their mortgage that had a lower interest rate.
Things that make this current market interesting or perhaps challenging are the added stress of Covid-19. During the shut down many homeowners took forbearances and now are having to pay extra. If they were lucky they were able to tack the delinquent payments onto the end of the mortgage term, however, those who agreed to pay extra every month to get caught up may not have the extra income to do so. In addition, inflation seems to be spiraling out of control. However, gas prices have dropped in the last week which will give some downward pressure on the cost of goods that need to be transported.
Owning a home is always going to be the best option, especially if you have to rent. If you are living at home and don't have to pay your parents. I have a young son still living at home, but, he does have to pay rent. It is the responsible thing to do, it prepares him for the day when he will move out on his own and have to budget for rent/mortgage and other things he needs to survive.
Last year I bought a home. I had been paying $1900 a month for rent, that same townhome is now $2100 a month. My mortgage is $1714 per month and the house is mine. $2100 per month equates to a purchase price of about $325,000. When you own a home you can claim your interest payment and taxes on your income tax. The same can not be said for your rent.
We all have to live somewhere and we can't always time our lives to coincide with the housing markets' highs and lows. All we can do is do our best and do what is best for us. What is putting pressure on the current market is rising interest rates, and continued demand for homes and, low inventory.
Owning your own home is the American Dream. The press will always report doom and gloom (if it bleeds it leads) and not necessarily the high points. If you are able, buy a home. It is the best investment and really is a hedge against inflation. Rents go up annually, and taxes go up but that is such a small portion of your monthly payment (and it is tax-deductible).
From an expert standpoint, hire an experienced Realtor who has been in the business a long time, someone who understands economics and market cycles. Get preapproved with an experienced, reputable local lender, who will have a vested interest in helping you get to the finish line.
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If you are thinking of buying or selling a home in  Maryland give me a call at 410-292-0100 or start your search here and I'll talk about the market conditions and what your home could possibly be worth in today's marketplace if you are thinking of selling.  If you are considering buying a home, there is no better time than now to buy. The tax savings and wealth building alone are worth the plunge into today's market. Coldwell Banker and I are connected with some of the brightest and best real estate agents in the world and can assist with your move here to Maryland or anywhere in the United States or abroad.  Ask me how.

During these trying times, Coldwell Banker and I are equipped with the latest technology to sell your home using Virtual Open Houses, Virtual showings, electronic signing, virtual inspection, and even online closings.   You can reach out to me through Snapchat, Duo, Skype, Google Hangouts, What's App, text messaging, or simply by phone.  We take your and your family's health and safety very seriously.  

June Piper-Brandon ~ Associate Broker ~ MRP, AHWD, CDPE, ePro

Coldwell Banker

410-292-0100 - Direct   410-461-7600 Office

June Piper Brandon - Agent with Century 21 New Millennium

June Piper Brandon - Agent with Century 21 New Millennium

Comments (8)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great advice, June... the media uses headlines to "sell" their stories, but often they are not well researched. So long as we have less inventory than demand we have no real bubble.

Jul 05, 2022 05:22 AM
Gwen Fowler-864-710-4518 SC * Mountain* Lake*Home
Gwen Fowler Real Estate, Inc - Walhalla, SC
Gwen Fowler Real Estate, Inc.

My theory is if you need something-buy it.  Houses and being safe are true needs-not wants.  4 bedrooms and 4 baths are wants.  Buy what you need in a safe area.  Once it is paid for you can move up to some of your wants.

Jul 05, 2022 05:22 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning June.Prudent buyers buy when they need to buy. I was on who got caught in the 80's when rates were in the high teens snd you paid three points. Did I wait, hell no. Paid the price. When you need to sell, it is time to sell. Be prudent and do what is bet for you. Enjoy your day.

Jul 05, 2022 05:28 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi June - hire a professional and stop listening to the media.  That is my advice.

Jul 05, 2022 07:00 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello June - trusted local real estate advice comes from professionals in that industry and knowledgeable about that area.  I imagine everything else could be dismissed as a chit-chat.  Unintentional eavesdropping over the years has taught many lessons.  

Jul 05, 2022 07:53 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Good Morning June and thank you for the great information to share with us here in the Rain.  Make it a great day!

 

Jul 05, 2022 08:18 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

This is an excellent post with great information. Thanks for sharing it.

Have a super fantastic week!
Joe Jackson, Realtor-KWCP

Jul 05, 2022 08:22 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi June,

You are giving your clients very good advice.  You are so right "if it bleeds it leads."  Unfortunately, it can send the wrong signals to homeowners or potential homeowners.

I have owned real estate since 1972.  All but my Sedona home were in California. We only saw one "bubble".  This was in 2010. Even then, the value did not drop below what I paid for the home.  There is no better hedge than owning real estate.

Jul 05, 2022 06:38 PM