Looking to avoid foreclosure because you are afraid of another property market collapse, like the one in 2008? Well, at least you may take solace in the fact that current market conditions are very different.
The low availability of houses is a major issue here. Instead of a surplus of available houses, we now have a seller’s market. There isn’t enough data to suggest an oversupply of homes, which is necessary for a housing catastrophe.
Let’s examine the sources of housing supply more closely:
People who are selling their homes
Building brand-new residences
Distressed real estate, sometimes known as foreclosed or short-sold homes
Analyzing the Housing Market Right Now
Selling Homeowners can Avoid Foreclosure
The increase in housing stock over the past year is encouraging, but it remains much below “normal.” According to the most recent numbers, there is a lot less stock than there was back in 2008. To sum up, there are not an excessive number of houses on the market, which keeps prices from falling.
Built From Scratch
There may be talk of new development, and you may question if the builders are taking things too far. The fact is that our current low supply is the result of years of underbuilding. Even if new building is on the rise, it is not yet enough to establish a surplus, especially because builders are wary of repeating mistakes.
Properties in Distress
At last, let’s discuss mortgage defaults and short sales. Now that most purchasers are pre-approved for loans thanks to tighter lending laws, the number of foreclosed homes has decreased. Homeowners have been able to avoid foreclosure thanks to laws such as moratoriums and forbearance provisions.
What do you think, in the end?
Due to a shortage of housing, another catastrophe of the scale of 2008 seems unlikely. A significant decline in price is highly unlikely due to high buyer demand and poor supply.
To sum up, the existing housing supply does not indicate an impending market meltdown. You may relax; the world outside is very different from what you may be used to.
