The “housing bubble” topic has been raised a lot lately.
Here’s what the experts say about it.
A recent report by CoreLogic revealed that U.S. home values appreciated by more than 37% over the last five years. Some are concerned that this is evidence we may be on the verge of another housing boom & bust like the one we experienced from 2006-2008.
Recently, several housing experts weighed in on the subject to alleviate these fears.
Sean Becketti, Freddie Mac Chief Economist
The evidence indicates there currently is no house price bubble in the U.S., despite the rapid increase of house prices over the last five years.
Edward Golding, a Senior Fellow at the Urban Institutes Housing Finance Policy Center
There is not likely to be a national bubble in the way that we saw the first decade of the century.
Christopher Thornberg, Partner at Beacon Economics
There is no direct or indirect sign of any kind of bubble.
Bill McBride, Calculated Risk
I wouldnt call house prices a bubble.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices
Housing is not repeating the bubble period of 2000-2006.
A recent article by Teo Nicolais, a real estate entrepreneur who teaches courses on real estate principles, markets, and finance at Harvard Extension Schol concluded that the next housing bubble may not occur until 2024.
The article, How to Use Real Estate Trends to Predict the Next Housing Bubble, looks at previous peaks in real estate values going all the way back to 1818. Nicolais uses the research of several economists. The article details the four phases of a real estate cycle and what defines each phase.
Nicolais concluded his article by saying:
Those who study the financial crisis of 2008 will (we hope) always be weary of the next major crash. If George, Harrison, and Foldvary are right, however, that wont happen until after the next peak around 2024.
Between now and then, aside from the occasional slow down and inevitable market hiccups, the real estate industry is likely to enjoy a long period of expansion.
The reason for the price appreciation we are seeing is an imbalance between supply and demand for housing. This has created a natural increase in values, not a bubble in prices.
Seattle specifics
We, in Seattle, have been experiencing rapid growth for several years and have a few things about our market that are special.
Work with a professional who knows and navigates our real estate market daily. It makes a big difference in not only your return on investment, but also in the overall process itself.
If a real estate change is coming sooner than later, whether in residential or commercial markets, you’ll definitely want to share your vision and goals before you get in with a trusted Metropolist broker.
