Debunking the Theory that a New Housing Bubble is Forming


 

With low supply and pricing on the rise, it is easy to wonder whether or not we will experience another Arizona housing bubble.

Here are some things to consider: House Bubble

– In the past, Lenders were very lenient and not concerned with future housing values. This has changed.

– Demand is high due to pent up buyer demand.

– Supply is beginning to increase according the The National Association of REALTORs

– Investor interest will decrease as prices go up.

– Any increase in interest rates will cut into the price point of what the buyer can afford.

– Lastly, according to Trulia, prices are below their fundamental value in the vast majority of the country (91 of the 100 largest metros).

– The Price to Own is almost consistent with the Price to Rent. When you see the Price to own spike above the cost to rent, then it might be time  to worry about another bubble on the horizon.

It is my opinion that we are not on the verge of another bubble- at least yet. The housing market has always been cyclical and that is manageable as long as the wheel doesn’t start spinning faster than the foundation is created beneath it.

To learn more about how supply and demand can impact your decision to buy and/or sell real estate in Arizona, contact James Wehner at 480-323-5462.


About the author

As a successful real estate investor and Realtor®, James Wehner’s focus is to assist buyers (investors, first time home-buyers, second home-buyers, relocation…etc) and help them find the best deal that matches their real estate needs.

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