2022 Boise Idaho Real Estate Blog

The 3 Reasons Why the Housing Market Isn't Crashing (and Why It Won't) Main Treasure Valley Life

Our most recent blog talked about how the market is shifting and how it is no cause for concern. Rather, we are seeing the inventory increase and the real estate market start to get a little healthier. We dug up some more data on how and why this is happening and explained why this is healthy for the market, but not the first signs of a crash 

We recently published an article explaining how the market is shifting that ties closely into this blog. Click the link to read our data-driven analysis.

 

Here are three reasons why the market is not crashing:

First, this graphic by the real estate data website, Keeping Current Matters, whose most recent graphic shows that home prices have increased during the majority of the recessions since 1980. The last time values fell was in 2008, when home values dropped by an average of 19.7%. This 19.7% represented more than a decade of steady home price growth, highlighting why buying real estate is one of the best investments you can make. 

Home values in Boise, Idaho have grown by 62% in the last two years. IF home values were to drop by 19.7% now from the current median list price of $599,999, the average home price in Boise would drop to $481,800, which is where prices were at the end of 2020. IF the market fell by that much again, it wouldn’t fully reverse the 2 years of utterly unhinged growth.

Second, this article by the CEO of the real estate investing resources website, Bigger Pockets, which sites that people have been predicting the market will crash since the US economy recovered from the Great Recession in around 2012-13. He even cites two articles per year from 2013 to 2021 about people predicting or expecting a “housing crash” or a “housing bubble”, which hasn’t happened. I bet every person reading this knows at least half a dozen people who are waiting for the market to collapse before buying again. According to the aforementioned article, these same people have been waiting for nearly a decade for another collapse.

Finally, one of the biggest reasons why the market won't crash and there won't be a wave of foreclosures is the amount of equity homeowners gained in their homes since 2020 or even 2021. With how fast home values rose, people instantly gained tens of thousands of dollars in equity between when they went under contract and when they closed. Idaho has consistently been at or near the top of home equity gains for multiple years now, sometimes doubling the national average equity gains. If people go into dire straights and need to sell their homes, it is much easier and faster to sell the traditional way with a local real estate agent than to go through the foreclosure process. Currently, very few homeowners nationwide are underwater on their mortgages and home values will continue to increase, albeit at a slower, more normal pace. 

 
Posted by AndrewS at 6/8/2022 2:58:00 AM

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