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Last updated on December 9th, 2021 at 11:02 am
Home prices are surging to new records. Along with the low-interest rates the housing market has a unique ability to support runaway prices.
Investors and economists believe that the state of the present-day housing market, is similar to that from 2004 to early 2007, before prices crashed and wreaked havoc in the nation’s history.
A few economists are sure that the current housing prices are simply a bubble that will burst, and take the economy down with it.
Some along with home prices also have their attention on other factors like labor shortage, high inflation, disruption in supply chain and to add to the agony the ongoing pandemic, which is one of the causes of all of these problems.
The great recession started with big home inventories and huge vacancy rates leading many experts to believe that it is because of an endless supply of buyers who were willing to pay, in spite of the rising home prices that too ended.
The home prices started declining, losing 26% of their value before hitting the bottom.
According to the National Association of Realtors, housing prices are rising higher than during the bubble. The median price of existing homes is now at $352,800.
Mark Zandi, the chief economist at Moody’s Analytics, feels the market and economy won’t crumble like last time. He feels the increase in home prices will level out, falling at some parts of the country and gaining at others.
Many economists believe that because of stronger underwriting standards on the majority of homes there is no chance of the 2007 destruction.
Ivy Zelman, CEO of Zelman Associates, feels that the current housing shortage is merely an illusion.
She feels with the current situation of building optimistically improving and more in the pipeline, there could be a surplus of homes in the market.
Reference Source: WTVA
