The real estate market is often subject to fluctuations, and opinions about its current state can vary. In this article, we’ll take a look back at the challenging real estate market between 2008 and 2012, commonly referred to as the housing crisis, and compare it to the present. By analyzing key factors such as inventory levels, unemployment rates, distressed sales, and lending practices, we’ll gain a better understanding of the differences between the two periods. Let’s delve into this flashback analysis to draw our own conclusions about the state of the current real estate market.
Inventory Levels:
During the housing crisis, the market experienced an oversupply of homes, with inventory levels reaching an astounding 19 months. Comparatively, today’s market boasts a balanced inventory of just 1.9 months. The significant reduction in available homes indicates a more favorable situation for sellers, as properties are in higher demand.
Unemployment Rates:
The period from 2008 to 2012 saw high unemployment rates, which had a direct impact on the real estate market. In contrast, the present job market has considerably lower unemployment rates, currently around 5.3% or even lower. Stable employment levels contribute to homeowners’ ability to meet their mortgage obligations, reducing the risk of foreclosures.
Distressed Sales:
Distressed sales, including foreclosures and short sales, were prevalent during the housing crisis, making up a significant portion of the market. However, today’s market sees distressed sales at less than 1%. This dramatic decrease demonstrates the overall financial stability and stronger equity positions of homeowners, safeguarding against forced property sales.
Lending Practices:
Obtaining a loan in the current market is noticeably more challenging than it was prior to 2008. Stricter lending regulations and increased scrutiny on borrowers’ qualifications have ensured that those entering the housing market possess significant equity and financial stability. Although recent buyers may have less equity due to their purchase timing, the long-term view remains positive as long as they can comfortably afford their mortgage payments.
Housing Shortage:
One of the prevailing issues in today’s real estate market is a shortage of available homes. Low interest rates have discouraged homeowners from selling, resulting in limited supply. Additionally, the rising costs associated with new construction projects, including the conversion of commercial buildings to residential spaces, contribute to the shortage. As demand persists, prices are likely to rise due to the fundamental principles of supply and demand.
Bottom Line:
Comparing the current real estate market to the tumultuous period of 2008-2012 reveals stark differences. The significant drop in inventory levels, lower unemployment rates, minimal distressed sales, and stricter lending practices indicate a more stable and resilient market today. However, the persistent housing shortage poses challenges for buyers and calls for proactive measures to increase the housing supply.
If you’re considering selling your property, it’s crucial to recognize that now may be an opportune time to do so, despite some misconceptions about the market. For those interested in homeownership, reaching out to experienced professionals can provide valuable guidance and insights. Remember to stay informed, engage with reputable sources, and make well-informed decisions when navigating the real estate landscape.
Whether you’re buying or selling, if you have any questions or would like to explore home ownership further, feel free to reach out to us. Don’t forget to share this video, like, and subscribe to stay updated with the latest real estate trends and insights.
Watch the video below and join John, Johnny, and Randolf as they guid you though this flashback analysis of the 08-12′ market.