Top 5 Reasons a Housing Market Crash Is Not a Given

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Gray Frame Corner

Real estate prices have never been higher, and there are no signs of them slowing down soon. While the stock market and other asset classes, such as precious metals, have collapsed, housing market prices keep defying gravity.

Of course, during a bubble, rational thinking can be replaced by fear of missing out—buyers who feel the pressure to buy and believe that the high prices will lead to higher prices.

Is the Bubble About to Burst?

As per a recent Redfin survey, 77% of homeowners think there is a bubble in their home area. Is this a sign the housing market will crash? Not necessarily.

Indications of a Housing Market Crash?

The answer is that while the housing price appreciation we’re witnessing is reminiscent of a bubble, you’re unlikely to conclude the same if you dig into the fundamentals.

Is There a Problem?

Like listed stocks on the stock market, the price of real estate can rise and fall sharply, as they are doing now, and then remain stable for years. The most likely consequence is that prices will level off.

Cool Rather Than Crash

The consensus from analysts is that while there may be some signs of a bubble, rather than crashing, the housing market will likely cool over the coming months.

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