Why You Shouldn’t Expect a Housing Crash in Grand Junction
Are we in a bubble? Is there going to be a crash? While we’re certainly riding the ups and downs of this rollercoaster market, there are a few key differences between this market and the one back in 2008.
Keep reading to learn what Janice Burtis has to say about the present market and the past.
A 2008 Snapshot
1. Slipping Mortgage Standards
Looking back at the statistics in 2008, nearly anyone could get a mortgage—and it was most likely for a home they couldn’t afford. By granting all these loans, banks were creating artificial demand for the housing market. This led to many homeowners defaulting on their loans and ushering in a new wave of foreclosures. The economy took a huge hit from all these loans crumbling beneath faulty restrictions—and luckily, the mortgage industry has taken many steps to learn from their errors in the past.
2. Abundance of Inventory
Because of the banks’ artificial demand, builders and contractors rushed to fill these demands that didn’t exist. Then, once the foreclosures hit the market, there were too many homes and not enough buyers—forcing national home prices to plummet at an alarming speed.
Today’s Market
1. Changing Interest Rates
Many experts predicted the mortgage rates to ease-off at the end of 2022, but the continued hikes in the market are starting to turn some heads. These increasing mortgage rates are still a direct result from rising inflation.
The Feds alter the mortgage rate in an attempt to combat inflation, so we will most likely see the rates bounce up and down as they battle to get inflation under control.
2. Rate Locked Sellers
What do we mean by “rate locked”? A wide portion of the nation’s homeowners are sitting on a mortgage rate around 4% or lower, and they are hesitant to enter the market and swap their rate for the current percentage. This lack of sellers has contributed to another shortage of inventory as we ease into the spring housing market.
How can you navigate the market?
As we compare the current market trends to the housing bubble of 2008, it’s clear that we are tackling much different hurdles—and luckily, these seem to be temporary trials. Experts foresee the mortgage rates leveling out throughout the year as the market picks up in the spring and summer months.
Will your house lose its value? Considering we are still experiencing an inventory shortage, you can expect your home to continue to appreciate. As long as supply outweighs demand, your home will continue to gain equity—even if it’s at a slower pace than it was in 2021.
At the end of the day, we don’t foresee these market changes causing a housing crash. While we expect there to be waves as we navigate these mortgage spikes, you can expect calmer waters as the year progresses.
If you are looking to buy or sell your home in the coming months, it is always beneficial to work with an experienced agent to guide you through the ups and downs of the market. The Janice Burtis Team is always happy to assist with your real estate needs.