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Real Estate

Real Estate Market Trend Report

Even the hottest markets eventually cool. This does not necessarily imply a large "bubble and crash"

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Staggering levels of unaffordable mortgage debt was a huge factor in the 2008 crash, but right now, mortgage debt as a percentage of disposable income is close to an all-time low. Therefore, a tsunami of foreclosures and short sales - is not imminent.
Staggering levels of unaffordable mortgage debt was a huge factor in the 2008 crash, but right now, mortgage debt as a percentage of disposable income is close to an all-time low. Therefore, a tsunami of foreclosures and short sales - is not imminent. (Macroeconomic Indicators Report (source Compass Real Estate) )

Even the hottest markets eventually cool.

This does not necessarily imply a large “bubble and crash” (terms much overused).

Over the past 4 decades, a cooling shift has typically meant a gradual decline in sales activity, then either a leveling off in appreciation or price declines of 5% to 10%: More like a slow leak in an over-pressurized tire than a blowout at high speed.

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The 2008 subprime crisis – a true bubble & crash – was an extreme event brought about by a massive failure of ethics, underwriting standards and risk management in the loan, banking, investment and ratings industries.

A correction is not a crash.

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The precipitating factor in the 2008 crash – tens of millions of households talked into home loans they couldn’t afford, forcing frantic sales during a recession – does not apply today.
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Pete Sabine
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