Are We In a Housing Bubble? Salt Lake City Utah Real Estate

Are We In a Housing Bubble? Salt Lake City Utah Real Estate

A housing bubble could depend on different economies and different individuals. There are so many factors that play into why people think we could be in a bubble. A bubble implies something that is not sustainable. So, what is not sustainable in terms of the housing market? Crazy low interest rates, low housing inventory, using up all of your cash in your savings to buy a house are all examples of what not is sustainable in the housing market.

We’ve also been seeing a lot of cash come out during this housing market from all different places including savings, investments, stocks, selling a property with equity in it and people have been reallocating this money to put it somewhere else like into a home.

Many businesses have also been relocating since Covid-19, especially out of California. When these businesses move they will help grow economies in different areas of the country depending where they are moving to. These businesses are either letting their employees work remotely where they were originally located so they don’t have to move, or some employees, depending on the business, will have to move to where the company relocated.

We will also dive into homeowners’ equity, home appreciation, and home values in the video and how all of these play a role in our housing market and purchasing a home. In this market right now, there is a lot of pressure on appraisers and one of these reasons is the appraisers are trying to keep up with the demand since there are so many homebuyers on the market. Since the housing inventory is so low right now and demand is so high, home prices in our current housing market are being pushed up. This is why a lot of people have been sending in home offers at above asking and offering generous deals to home sellers.

The market could correct itself if homeowners couldn’t sustain their livelihood and needed to sell and buyers didn’t have enough savings to buy a home which could cause home prices to decrease with less demand and more supply.

There is also a lot of pressure on real estate agents to guide their clients wisely so they don’t end up with little to no equity if something shifts.

We will also discuss in the video if now is a good time to sell your home. This always depends on the situation like if you need more space for a growing family then you should, but if your home could continue appreciating over the next couple years it could be best to wait. It can be difficult to speculate when a change in the housing market could happen so it can be difficult to tell when a good time to sell is. Depending when you bought your home and your equity, if you did a cash out refinance, or home equity line of credit then this will also all affect if you should sell your home. Overall, don’t sell your property to time the market since it is difficult to time the market exactly. We also discuss if selling your rental property is a good idea in this market, but this also depends on the situation.

Is it a good idea to buy in this market? This also really depends on your individual situation. If you own a property and are trying to purchase a new property for the same amount, then this makes sense to do so. If you’re purchasing a bigger home, your payment is going to be larger, but the down payment should trade itself out for what you’re selling your property for and what you’re putting down on the new property. If you’re re-entering the market or a first-time homebuyer, purchasing a property is going to be much more difficult if you don’t have a home to sell.

If you don’t have the finances to put down a down payment then it might be best to wait to buy and rent in the meantime even though you’re not getting a return on your money when you rent, it could be more difficult to purchase a home now in the current market. If you do have a large enough down payment you might still have to put down extra money on top of that to secure the property. You could always pay more in mortgage insurance, which in this case would make sense to buy a home in that situation. This is because the mortgage expense you pay over time or by the time you can refinance would be just a minimal cost.

If you can pay all cash on a property or on real estate then absolutely yes you should buy and invest now. It is always a good idea to invest in real estate. Real estate is always a great investment and typically real estate prices will generally always increase over long periods of time. Even if there is a dip in the market and values go down temporarily, prices typically will always generally rise over time even if the values fall for a period in time they will bounce back and increase again.

If you have questions on your individual situation and what is best for you then feel free to contact with me for advice. I would be happy to help!

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