Why The 2008 Housing Crisis Will Not Repeat Itself
“I’m waiting on the wave of foreclosures to hit before I buy my new home”, Craig told friends at lunch yesterday. “Everyone knows the 2008 housing crisis will repeat, and when it does, I’ll be buying at a huge discount!”
If you have the same assumptions as Craig, you are simply wrong, my friend! And here’s why… Foreclosure postings in 2022 are only at 1% of where they were during the housing crisis of 2008. Maybe you’re similar to Craig, hoping for a repeat of 2008 in order to step in and grab a great deal…The primary difference between 2008 and 2022, though, is inventory.
In 2008, the housing market had been overbuilt for four consecutive years, resulting in several thousand homes in excess inventory brought to market. Four years of surplus inventory across all of the largest markets in the United States resulted in market value toppling under the weight of these homes, seriously disrupting the balance of supply and demand. Values crashed and foreclosures zoomed to record numbers.
Inventories these days are much less oversaturated. In fact, there are more buyers than there are sellers. Yes, things have slowed over the last year with the increasing interest rates and the overall impact of inflation. But the number of available homes on the market is nowhere near what it was in 2008, allowing prices to remain stable.
If you’re considering buying anytime in the near future, contact us to talk you through the current market trends and your options. We’re happy to help!