If you’re holding out hope that the housing market is going to crash and bring home prices back down, here’s a look at what the data shows. And spoiler alert: that’s not in the cards. Instead, experts say home prices are going to keep going up.
Today’s market is very different than it was before the housing crash in 2008. Here’s why.
It’s Harder To Get a Loan Now – and That’s Actually a Good Thing
It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one.
Things are different today. Homebuyers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is:
The peak in the graph shows that, back then, lending standards weren’t as strict as they are now. That means lending institutions took on much greater risk in both the person and the mortgage products offered around the crash. That led to mass defaults and a flood of foreclosures coming onto the market.
There Are Far Fewer Homes for Sale Today, so Prices Won’t Crash
Because there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), that caused home prices to fall dramatically. But today, there’s an inventory shortage – not a surplus.
Today, unsold inventory sits at just a 3.0-months’ supply. That’s compared to the peak of 10.4 month’s supply back in 2008. That means there’s nowhere near enough inventory on the market for home prices to come crashing down like they did back then.
People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s
Back in the lead up to the housing crash, many homeowners were borrowing against the equity in their homes to finance new cars, boats, and vacations. So, when prices started to fall, as inventory rose too high, many of those homeowners found themselves underwater.
But today, homeowners are a lot more cautious. Even though prices have skyrocketed in the past few years, homeowners aren’t tapping into their equity the way they did back then.
Black Knightreports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has actually reached an all-time high:
That means, as a whole, homeowners have more equity available than ever before. And that’s great. Homeowners are in a much stronger position today than in the early 2000s. That same report from Black Knight goes on to explain:
“Only 1.1% of mortgage holders (582K) ended the year underwater, down from 1.5% (807K) at this time last year.”
And since homeowners are on more solid footing today, they’ll have options to avoid foreclosure. That limits the number of distressed properties coming onto the market. And without a flood of inventory, prices won’t come tumbling down.
While you may be hoping for something that brings prices down, that’s not what the data tells us is going to happen. The most current research clearly shows that today’s market is nothing like it was last time.
No matter how you slice it, buying or selling a home is a big decision. And when you’re going through any change in your life and you need some guidance, what do you do? You get advice from people who know what they’re talking about.
Moving is no exception. You need insights from the pros to help you feel confident in your decision. Freddie Macexplains it like this:
“As you set out to find the right home for your family, be sure to select experienced, trusted professionals who will help you make informed decisions and avoid pitfalls.”
And while perfect advice isn’t possible – not even from the experts, what you can get is the very best advice out there.
The Power of Expert Advice
For example, let’s say you need an attorney. You start off by finding an expert in the type of law required for your case. Once you do, they won’t immediately tell you how the case is going to end, or how the judge or jury will rule. But what a good attorney can do is walk you through the most effective strategies based on their experience and help you put a plan together. They’ll even use their knowledge to adjust that plan as new information becomes available.
The job of a real estate agent is similar. Just like you can’t find a lawyer to give you perfect advice, you won’t find a real estate professional who can either. That’s because it’s impossible to know everything that’s going to happen throughout your transaction. Their role is to give you the best advice they can.
To do that, an agent will draw on their experience, industry knowledge, and market data. They know the latest trends, the ins and outs of the homebuying and selling processes, and what’s worked for other people in the same situation as you.
With that expertise, a real estate advisor can anticipate what could happen next and work with you to put together a solid plan. Then, they’ll guide you through the process, helping you make decisions along the way. That’s the very definition of getting the best – not perfect – advice. And that’s the power of working with a real estate advisor.
If you’re looking to buy or sell a home, you want an expert on your side to help you each step of the way. Connect with a real estate professional so you have advice you can count on.
If you are looking for a home in Arizona, Casa Grande is a select area. Casa Grande has a rich history, founded in 1879 as a mining town. Currently, this city in Pinal County has a population of approximately 35,000. Residents of Casa Grande will find a variety of recreational activities, outdoor experiences, and a strong sense of community.
Reasons to Find Houses for Sale in Casa Grande, Arizona
There are many reasons to find and choose a house in Casa Grande, Arizona, besides its warm and sunny weather. This city is strategically located between Phoenix and Tucson, offering a small-town atmosphere with easy access to more metropolitan areas. Casa Grande features a proud sense of history combined with modern amenities and growth.
Attractions and Things to Do
There are many interesting areas to visit and things to do in Casa Grande, whether you are looking for important landmarks or modern entertainment. Here are just some of the fun attractions Casa Grande has to offer:
Casa Grande Ruins National Monument: Casa Grande, or “Big House,” is one of the largest prehistoric structures built in North America. Visitors can see Casa Grande Ruins, which became America’s first archaeological preserve.
The Paramount Theatre: This theatre was built in 1929 and hosted the first “talking” picture show in Pinal County.
Casa Grande Valley Historical Society: In 1879, this city was actually named Terminus since it was the end of the railroad line. Visitors can learn from the research facilities here and view photographic reproductions.
Picacho Peak State Park: Visitors can see Picacho Peak, which is a landmark that was often used by explorers and expeditions to this area.
Promenade at Casa Grande: This busy center hosts several venues for dining, shopping, and entertainment.
Casa Grande has an excellent public school system in addition to available charter schools. This district earns consistent awards among schools in the state of Arizona.
Casa Grande is experiencing growth in job opportunities and business. In addition, it is located close to busier metropolitan areas that are also undergoing growth and that offer a wide range of employment and career opportunities.
Selective Neighborhoods in Casa Grande, Arizona
Casa Grande is conveniently located near downtown Phoenix and Tucson as well. This smaller city offers several residential options. In addition to its beautiful scenery, warm weather, and excellent schools, Casa Grande is home to recreational and cultural activities for all to enjoy.
When it comes to Arizona real estate and buying a home in Casa Grande, here are some highly rated neighborhoods and relevant information to consider for your selection:
Evergreen is a popular neighborhood in Casa Grande with a variety of homes. Residents here are close to amenities for entertainment, shopping, and dining. There are also lovely parks to explore for outdoor fun.
Downtown Casa Grande
Downtown Casa Grande is considered an affordable housing area and offers a wide range of housing options. This neighborhood is close to the historical sites of Casa Grande in addition to modern shopping, dining, and entertainment venues. Downtown Casa Grande also features many outdoor spaces to enjoy.
Casa Grande East
Casa Grande East is considered a very affordable neighborhood for young professionals or families just starting out. In addition to its proximity to stores, restaurants, and other amenities, Casa Grande East is close to Peart Park and the Casa Grande Public Library.
Casa Grande Vista
Casa Grande Vista is a popular neighborhood with many single-story family homes. This area is centrally located so that shopping, dining, entertainment, and outdoor areas are very accessible.
The Listing Pad
No matter where you begin your search for homes in Casa Grande, Arizona, The Listing Pad is your ideal agency for Arizona houses. At The Listing Pad, we believe in the benefits of flat fee brokerage and direct representation of our clients as part of our family business. We work for you to provide expert, attentive real estate experience for a low flat fee. Call our office for more information! www.thelistingpad.com
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If you have questions about buying, selling, or just want to chat about market conditions, please reach out. We love what we do.