housing inventory Brad Cohen September 28, 2023
If you're considering buying or selling a home in Harrisonburg, VA, you've probably heard some rumblings about the housing market. The fear of another housing crash, like the one we saw in 2008, might be keeping you up at night.
But here's the good news: there's no impending housing market crash on the horizon.
The 2008 housing crash back then left a scar on the real estate landscape, and understandably, it's not an experience anyone wants to relive. But guess what? The housing market today looks drastically different from what it did in 2008.
Inventory: From Oversupply to Undersupply
Back in 2008, the housing market was flooded with homes for sale. An oversupply of properties led to plummeting home values and, eventually, the infamous housing crash. Today, it's quite the opposite. We're dealing with an undersupply issue. To recreate the conditions of 2008, we'd need a situation where there are more sellers than buyers. Right now, that's not happening.
Homeowners Holding Steady
Homeowners in Harrisonburg, VA, aren't rushing to sell their properties in droves. While the housing supply has increased compared to the previous year, it's still relatively low. If we compare the current data to 2008, it's evident that there's only about a third of the available inventory today. This means there's not an imminent threat of a housing crash caused by homeowners trying to offload their properties quickly. For a crash like 2008, you'd need a scenario with too many homes on the market and not enough buyers, and we're far from that situation.
Builders Learning from the Past
Newly built homes also play a crucial role in the housing inventory equation. Some might be concerned that builders are overdoing it, but the reality is quite the opposite. In the past, there were 14 years of underbuilding, which contributed to today's low inventory levels. Builders have learned from the past and are intentionally not overbuilding like they did during the housing bubble. While construction is picking up and moving towards the long-term average, it's unlikely to create an oversupply because there's a considerable gap to fill.
Tightened Lending Standards
One of the driving forces behind the 2008 housing crash was loose lending standards. Many people were able to secure home loans they couldn't truly afford, leading to a wave of foreclosures. Today, lending standards are far more stringent. This means that we have more qualified buyers and fewer foreclosures. The data from the Federal Reserve shows how lending standards have evolved since the housing crash. Tighter standards have resulted in a significant decrease in foreclosures.
Additionally, in 2020 and 2021, the combination of a foreclosure moratorium and the forbearance program helped prevent a repeat of the wave of foreclosures we saw back in 2008. The forbearance program allowed homeowners to explore options like loan deferrals and modifications, which weren't available before.
If you're a potential homebuyer or seller in Harrisonburg, VA, the current state of the housing market should offer some peace of mind. Inventory levels aren't anywhere near what they would need to be for prices to drop significantly and for a housing market crash to occur.
According to experts, this shortage of inventory is expected to persist, especially with strong buyer demand still in play. As Bankrate states, "This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won't allow a price crash in the near future."
In a nutshell, Harrisonburg, VA, isn't on the brink of a housing market crash. Significant differences in today's market compared to 2008, such as inventory shortages, cautious builders, and stricter lending standards, all contribute to a stable and resilient housing market.
So, whether you're looking to buy your dream home or sell your property in Harrisonburg, VA, you can do so with confidence. The housing market is on your side, and there's no need to fear a repeat of the past. As always, it's wise to stay informed about local market conditions, consult with a reputable real estate agent, and make decisions based on your unique circumstances. Happy house hunting or selling!
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