It’s no secret, our local real estate market has been tough on buyers — fueled by low mortgage rates and limited supply. Finally, we have good news for local buyers. Housing inventory is currently at its highest level in more than a year in both Ada and Canyon counties.
While Treasure Valley has faced insufficient supply compared to the demand for years — the main driver of home prices. July marked five consecutive months of inventory growth as home prices reach record highs.
While the uptick in the number of homes for sale is great news for local buyers, they must still be prepared to act quickly the speed of the market continues to be fast... it's still a low-inventory seller's market.
With Treasure Valley home prices skyrocketing, there’s been a lot of speculation about you know what... Are we in a bubble? Will the local housing market crash? Will home values come plummeting to the ground again?
Most economists agree that today’s market is nothing like the market we saw in 2008 — and a crash is highly unlikely. Here are just a few of the conditions that economists say will ward off another crash:
Supply is limited.
For-sale listings are near their lowest points on record, and demand is strong. This keeps prices up, as most buyers need to up their bids to compete for the limited number of homes for sale.
Mortgage underwriting is stricter.
One of the problems in the last crash was that underwriting standards weren’t as tight as they could have been. As a result, there were loan approvals that shouldn’t have happened, and that led to a wave of foreclosures, which sent home values downward.
Homeowners have lots of equity.
Another thing that will stave off foreclosures is the record amount of home equity owners are sitting on now. This prevents homeowners from going underwater on their mortgage (i.e., owing more than it’s worth) if home values drop.
Demand will remain high.
The Federal Reserve has committed to keeping interest rates low at least through next year, so mortgage rates are expected to do the same for the foreseeable future. This can keep buyers in the game despite rising prices. Demographic changes — like millennials starting families — will likely also keep demand strong.
Homebuilding materials cost more.
New builds are priced higher, too, due to rising material prices. Material shortages are also preventing builders from increasing supply quickly.
The conditions aren’t there for another crash. However, in the unlikely event, the market does take a tumble, most homeowners have a great safety net of equity to protect them.
As we continue to monitor how COVID-19 is affecting the community, we wanted to share helpful resources. Nothing is more important than your health and safety. During this uncertain time, please don't hesitate to reach out with any questions you have about your home value, current housing market conditions, or anything else we can assist with.
Those thinking about selling or buying shouldn’t be concerned with ‘timing the market’, because the best time to buy or sell is when it fits your needs and circumstances. If you’re thinking about making a move, talk to your Real Estate Counselor and explore your options.
The Real Estate Counselors have a rich legacy dating back to 1977 with experience in residential, investment & commercial real estate sales and property management. Our experience and professionalism are without rival in the local real estate industry.