Key Takeaways
- The current market is quite different from the 2008 market
- The chances of a market crash are very low
- The Linda Craft Team can help homeowners navigate the 2023 real estate market
If you’ve spent any amount of time discussing the real estate market on social media, it’s possible you’ve been convinced that we’re on the verge of a housing market crash. While it’s true that the nationwide real estate market has been anything but predictable over the past few years, that isn’t indicative of the same disastrous results of the 2008 crisis. In fact, there is plenty that supports that today’s market is quite a bit different than what was experienced in 2008 and that instead of a crash, we’re staying closer to a healthier market.
Low Supply, Stable Pricing
Leading up to the 2008 crash, the housing market was inundated with homes. From 2006 to 2007, there was a drastic jump in the number of homes for sale, and that number only continued to climb into the following year. Because the supply was so high, homeowners were fighting to secure buyers, which meant resorting to more competitive pricing.
When you’re in an overly saturated market, sometimes your only option is to come down significantly in your price. And that’s what was happening as inventory rose and stabilized at record numbers. Though the supply of homes has climbed a bit going into 2023, it’s still much lower than the supply that was available 16 years ago. While some markets may see prices fall, the difference will be small and nowhere near 2008’s numbers.
Different Mortgage Standards
At the forefront of the 2008 collapse were mortgage companies. Though the standards have changed quite a bit since, leading up to the crash, lending institutions would give a mortgage to practically anyone, regardless of whether their financial situation made sense for the purchase of a home.
Despite being approved for home mortgages, many buyers faced difficulties affording their homes, which led to a rash of defaults and foreclosures. When more and more foreclosures hit the market, it results in lower prices and forces homeowners looking to sell to list at a lower price.
A Declining Rate of Foreclosures
Shortly before the crash of 2008, the rate of foreclosures climbed to an exponential number. Whereas the number of foreclosures in the fourth quarter of 2006 peaked at just over 200,000, by the same time the following year, they increased to just under 400,000. Within another year, they spiked to close to 550,000 foreclosures.
Today’s figures are nowhere near the 2007/2008 rates, topping out at around 63,000 foreclosures at the end of 2022. Even with projections stating that foreclosures will increase over the next year, the numbers will still remain far below what they were before the bubble burst. With fewer foreclosures on the market, pricing can remain steady and sellers won’t be forced to come down significantly.
Want Help Navigating the 2023 Real Estate Market?
Even though the threat of a crash is very low, navigating the 2023 real estate market is always best with a professional at your side. The Linda Craft Team is more than happy to guide you through current market trends and keep you abreast of changes that may affect your potential purchase.
We’re available to give new Triangle area homeowners and sellers peace of mind so that they may pursue the purchase of a new home or sale of their current abode. Contact us today and we’ll help you navigate the market, find you a home that fits your wants and needs, and give you the resources needed for a smooth sale.