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Are We in the Middle of Another Housing Bubble?


Are we in the middle of another housing bubble?

This question seems to be on a lot of our clients’ minds lately, and it’s easy to see why. Nationwide, pricing is roughly 1% below the peak pricing we saw in 2006  just before the housing crisis started. Mortgage rates are also still historically low despite the fact that they’ve jumped almost a half of a percentage point since the presidential election.

You should rest easy, though, because the mechanics and economics that were behind the housing crisis of 2007 and 2008 are not present in today’s market. Back then, our market was based on speculation and bad lending practices. Since that time, lending practices have really tightened down, and the qualification process for a home loan is much more stringent.

Here in San Diego, because our market is responding to supply and demand, we’re seeing very low supply, very high demand, and very reasonable mortgage rates. As we head into 2017, we’ll likely see mortgage rates rise even further. That’s not necessarily a bad thing, though, because it should temper our market to the point where it’s more balanced and less skewed toward sellers, which is what we’ve experienced the last three or four years.

Remember, every neighborhood is different, and every price point is different. If you have any questions about the market or are thinking of buying or selling, please feel free to give us a call or shoot me an email.

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