Wow, the Real Estate market has been remarkably hot for quite a while now with interest rates and inventory incredibly low, demand incredibly high and prices soaring to record levels.
I'm asked often now, as I was asked in 2006 & 1989, "Is this going to continue"? And the simple is....NO.
But, in 2021 what I believe we will see are:
1- Home Prices will continue to go up.
2- Interest rates will begin to rise and I wouldn't be surprised to see mortgage rates at 4% or above by years end.
3- The housing Affordability Index will go down, meaning less average income people/ families will be able to afford the average priced home in any given area.
4- Inventory and time on the market will begin to go up.
5- The word "inflation" will start to come back into the media and conversations.
Economically speaking, this pace cannot continue, especially in our current economy which is still fragile and not yet recovering.
This is NOT the same dynamics that were in place in the summer of 2006, which was the beginning of the biggest real estate market adjustment/ the collapse in my career or even lifetime, but the cycle will come.
To what degree, no one can be exact, but I don't believe another meltdown or even a deep dive is coming, but there will be slowing, flattening and some falling areas, for sure.
And a PS: I really dislike, the overused word "bubble".