People Fear A Housing Bubble As Prices Rise
By Ryan Velez
According to The Network Journal, time may be good again for people to get back into the real estate game if they were a bit leery before. Flipping houses has become popular again, interest rates are low, and property values are starting to appreciate faster. While this may sound great on paper, it also sounds very familiar, and a recent survey shows that people haven’t forgotten.
A national survey, done by Dallas-based ValueInsured, a down-payment insurance company, shows that people have grown increasingly concerned about the state of today’s housing market. Of the nearly 1,100 people surveyed in July, 58% say that they expect there will be a “housing bubble and a price correction” in the next two years — a 12 percentage point increase since April. It’s fair for people to be concerned, as what seems like a positive set of circumstances is similar to the housing bubble that hurt so many people’s finances in 2008 and 2009. Many of the people who are thinking about buying homes now saw the impact that this had on people then, and this is reflected in the demographics of those reluctant to get into the housing market.
63% of all homebuyers and a whopping 72% of millennials say they worry about timing the market accurately and want to ensure that they are not “buying high.” 80% of all homeowners reported thinking that this is a good time to sell. These figures may seem a bit disturbing at first glance, especially considering that homeownership fell to a 50-year low last year. However, this may actually be an overall positive regarding today’s homebuyers and sellers.
“What this is telling us about today’s home buyer is that they are much smarter and much savvier … they don’t want to get caught up in a similar situation as they were in 2007,” Joe Melendez, CEO of ValueInsured, said in an interview.
Some may see things another way, saying a lack of faith in the housing market may actually prove damaging in the future, but ultimately, it is too early to tell. Considering the issues of people buying what they ultimately can’t afford, perhaps caution is a true virtue when it comes to the market. If the economy continues its upward trend, we may see more of these fence-sitters finally take that step and buy a home.