Wow, the Real Estate market has been remarkably hot for quite a while now with interest rates and inventory incredibly low, demand incredibly high and prices soaring to record levels.
I'm asked often now, as I was asked in 2006 and 1989, "Is this going to continue"? And the simple is no.
But, in 2021 what I believe we will see are:
Home Prices will continue to go up.
Interest rates will begin to rise and I wouldn't be surprised to see mortgage rates at 4% or above by year's end.
The housing Affordability Index will go down, meaning fewer average-income people or families will be able to afford the average-priced home in any given area.
Inventory and time on the market will begin to go up.
The word "inflation" will start to come back into the media and conversations.
Economically speaking, this pace cannot continue, especially in our current economy which is still fragile and not yet recovering.
These are not the same dynamics that were in place in the summer of 2006, which was the beginning of the biggest real estate market adjustment or the collapse in my career or even my lifetime, but the cycle will come.
To what degree, no one can be exact, but I don't believe another meltdown or even a deep dive is coming, but there will be slowing, flattening, and some falling areas, for sure.
And a PS: I really dislike the overused word "bubble".