Ack wrote:Sadly, it doesn't. I'm worried we're gonna see another housing market crash.
I’m not so sure. The increase in prices today is for entirely different reasons than it was in the 2000s. Then, we had very healthy supply, but an artificial increase in demand (i.e., speculation). During and after the financial crisis, people basically stopped building houses for the better part of a decade. Accordingly, today, we have a very tight supply and genuine demand generated by people in a population wave (i.e., millennials) reaching an age where they have both the desire and means to purchase a home. Tight supply and high deman makes for a seller’s market.
Interestingly, there is also a tight labor market right now, and it’s incredibly difficult to get people to work on a home. As a result, and what I’m hearing from my friends who work in real estate, is that finished move-in ready homes sell instantly. Fixer-uppers, however, sit for quite some time, and only investors with crews on hand buy them. Of course, since they’re planning on renovating and reselling the house, they try to get a good deal on it, and fixer-uppers tend to sell at or around asking price. The lesson here is that, if you have the time and the ability to work on a home, you can still find something. You’ll just need to be prepared to put in some work! (That’s what we did with our current home. It had great bones, but when we bought it, it needed a ton of work. We’ve put a ton of work, and money, into it, but the amount we’ve spent is dwarfed by the amount it has appreciated, both as a result of the improvements and increases in home prices generally, since we bought it five years ago.)