One of the most popular searches on Google right now is "When is the housing market going to crash?" This search spiked 2,450% in March, and with reason. At the start of April, 42% of homes were selling for more than their list price.

Which looks very much like a bubble, and this is an obvious concern for buyers. Nobody wants to be underwater on their mortgage within months of buying a home. However, there are indicators that this time, things might be different.

Is the Housing Market on the Bubble?

Some economists...and realtors...are quite reasonably concerned. On the other hand, financial analysts are showing a different response. In fact, four of the major financial services giants have come to the same conclusion:

The market is legitimately strong and, furthermore, sustainable. According to Joe Seydl, a Senior Markets Economist with J.P. Morgan, demand is at a high level and "consumer surveys indicate that household buying intentions are now the highest in 20 years."

While inching up, interest rates are still very low. Supply, meanwhile, is down. Some of this is temporary, caused by halts in construction during the pandemic. Another issue is a shortage of lumber, caused in part by a surge in home improvement projects during the lockdown. This is also causing construction prices to rise. However, supply has been low for a while, despite numerous pushes to improve it.

Finally, demand has also been increased by the pandemic itself. Many people have realized that their current home is insufficient to handle doing everything at home, while others have been offered permanent work from home, allowing them to move further from their place of work.

How Long Will Prices Continue to Rise?

According to the experts, price increases are likely to continue for at least the next 12 months. Interest rates have also not yet normalized, and the Fed is unlikely to hike rates significantly before 2023. All of this means that the time to buy is now. This is not a bubble, because it is not fueled by speculation, but rather by a genuine demand for housing.

If you are looking to buy or sell a home right now, then you need to talk to Gail Rutkowski & Associates to get the best information on your local market and likely trends.

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