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, Chandler is a great city to consider. Chandler is a Phoenix suburb in Maricopa County with a population of just over 250,000. This city offers excellent neighborhoods and diverse communities, along with a variety of shops, restaurants, parks, and outdoor entertainment venues.
Reasons to Find Houses for Sale in Chandler, Arizona
There are many reasons to find a home in Chandler, Arizona, not the least of which is the warm weather. Here you will find, on average, 330 days of sunshine per year. Such minimal rainfall and mild winters make Chandler an ideal place to live for those who enjoy year-round outdoor activities such as golf and swimming.
Attractions and Things to Do
Chandler features a variety of attractions and things to do. Here are just some of the diverse experiences that Chandler has to offer:
Downtown: Chandler’s downtown area not only includes an array of eateries and shops, but it also hosts a center for the arts with diverse performances and weekly farmers’ market
Veterans Oasis Park: This park offers trails for hiking and biking as well as areas for fishing and picnicking across over 100 acres of wetlands and desert habitats. Visitors can also take part in the Sonoran Sunset concert series when available.
Arizona Railway Museum: This outdoor museum portrays the history of the railroads in shaping Arizona and the Southwest.
Eddie Basha Collection: This art gallery holds a world-class extensive collection of Western American and American Indian Art.
Chandler Museum: The Chandler Museum hosts local and national exhibits and family-friendly activities that explore history, art, and culture. It is next to the historic McCullough-Price House, blending preservation of the past and progress of the future.
Ease of Travel
Chandler is just 20 minutes from the international airport in Phoenix and is home to numerous hotels and resorts for out-of-town guests.
Chandler’s public school system is among the best—not just in the state of Arizona, but in the country as well. The city also has charter schools and institutions of higher learning.
Chandler has a growing job market with opportunities for entrepreneurs looking to start new businesses.
Selective Neighborhoods in Chandler, Arizona
Chandler is home to areas nicely suited for families as well as young professionals. This city features excellent public services, and exceptional public schools along with steady job and business growth. In addition to beautiful weather, Chandler is also known for its balance of recreational activities and cultural experiences.
When it comes to Arizona real estate and buying a home in Chandler, here are some highly rated neighborhoods and relevant information to think about for your selection:
Fulton Ranch is a sought-after community, south of downtown Chandler and close to San Tan Mountain Park. This area includes several amenities, such as:
Fulton Ranch is experiencing housing growth, which means that there are a variety of homes available and many of them can be customized to your style and preferences.
Ocotillo is another desirable neighborhood in Chandler. In this area, buyers can find homes of all types, including townhouses, condominiums, and large single-family houses. The Ocotillo community also features waterfront homes, multiple park areas and golf courses, as well as lakes and opportunities for various recreational activities.
Circle G is a neighborhood with family-oriented homes. This community is close to restaurants, shops, and parks. In addition, Circle G features fitness facilities and nearby golf courses. This mid-sized neighborhood is an excellent option for growing families.
Stellar AirPark is a unique community due to its privately owned airport with public use by members. In addition to numerous restaurants, shops, and other businesses in this community, Stellar AirPark offers beautiful and expansive homes. If you do happen to own an airplane, you can store it in the hangars for a yearly fee.
This up-and-coming neighborhood features affordable townhomes and condominiums that are well-suited to professionals new to the Chandler area. The work-live housing in Gila Springs is conveniently close to shopping, restaurants, and entertainment venues.
The Listing Pad
No matter which neighborhood you may be considering in Chandler, 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!