Why I Don’t Think The Housing Market is in a Bubble

I’ve been practicing real estate law on my own now for about 19 years. I have ridden all the waves - the ups of the early 2000’s market, and the crash/recession of the mid-late 2000’s. Up until the pandemic, I felt like I had seen it all. Boy, was I wrong.

People often ask me if I think the housing market bubble will burst again. I’m not an expert, but I will say, in my opinion, this market is not like the market prior to the crash in the 2000’s. This is why:

1) Lenders are not just giving away money - Since the crash, lenders have cracked down on the requirements to qualify for a loan. People can’t just go out and easily get a loan for more than they can afford. Gone are the days of no-doc and subprime loans. Everyone who is buying a home now is typically very qualified to do so. And the revision of the Truth in Lending laws have prevented lenders from screwing people over at the closing table with unnecessary fees.

2) Homes now are worth more than most people owe - Another reason for the horrendous crash in the market was the dive in home values. The average homeowner now in America has equity in their home, so if for whatever reason it becomes unaffordable, they can sell it at a profit.

3) Along with home values rising, the inventory is low - Builders have not overbuilt, there’s not a ton of inventory. So prices should not drop like they did at the crash, and there won’t be a ton of half-built homes that sit empty.

Do you agree? I’d love to hear from you at lawgoddess1@gmail.com.