FAQ: Are We in a Housing Bubble?

 

Following is just one of many economists' forecasts indicating that Utah is on a sustained path for significant homeownership growth: #9 in the country at 40.1% over the next 20 years. Add Utah's historical and long-term projected strong economy and my answer to clients is two-fold:

1. No, we are not in a housing bubble. Both primary residences and second-homes are selling to bona fide homeowners, either cash or as qualified buyers. Mortgage reform enacted in the last recession put the kibosh on the bad loan program nonsense that was one of the root causes.*

2.  Waiting for prices to come down is not a prudent home purchase strategy unless you're considering waiting until 2041 or later to buy.*

Data Source: Urban Institute https://urbn.is/3vqYw5y

If you're interested in gaining specific market insight as it relates to your unique homeownership goals, please contact me to schedule a virtual meeting. Kim Novak, Broker/Owner, Novak Advantage Real Estate call/text (801) 726-1443 or kim@novakadvantage.com

*These are professional opinions of the author and only in relation to the real estate market in Northern Utah*

#utahrealtor #utahrealestate #findinghomeinutah #housingbubble 

2020 Housing Forecast: Sunny Days for New Construction

"Home sellers will remain on the sidelines, but millenials are on the move."

I love this infographic. They say a picture says a thousand words and this one represents both a business plan and a marketing strategy for 2020.

Mortgage Rates by end of 2020 increase to 3.88%

(still crazy low)

Average Median Home Price up by 0.8% 

(median home prices predicted to increase 3.6% according to NAR's Forecast)

Homeownership Rate 64.6% 

(troubling: essentially no growth 2014-2019 resulting in less home equity wealth-building)

Source: NAR Real Estate Summit Forecast

Single Family Housing Starts up 6%

(new construction continues to position itself as a viable inventory shortage solution)

Existing Home Sales Down 1.8%

(existing homeowners are staying in place, plus purchases shifting to new construction)

Take Aways for 2020

• Low mortgage interest rates, minimal down-payment requirements, home equity wealth-building opportunity and the IRS mortgage interest tax deduction offer a winning scenario for Buyers in 2020.
• There will be more new-home inventory for Buyers to choose from, replacing the void created by the lack of existing-home inventory. New construction is the housing shortage solution for Buyers.
• For Sellers, the heyday of listing as-is and selling day-one with multiple offers is drawing to a close for this market cycle. New construction will continue to be the primary competition for existing-home sales into the foreseeable future. See Related Blog Post: Selling? Think Like a Buyer

Kim Novak is a CSP: Certified New Home Sales Professional and a CRS: Certified Residential Specialist. She can be reached at (801) 726-1443 or by email to kim@novakadvantage.com