A “crash” seems harsh. After 32 yrs in the business living through many up/down cycles I’m not seeing the pieces to that puzzle fitting together. What I do see is a market change like no other.
Think about this … pretty much every mortgage going back to the beginning of the recovery is more than likely a 30 fixed.
Folks and banks got a good helping of conservatism with the last crash. No more buying 5 – 10 properties, big toys, expensive vacations with “FREE” negative-am money on bad credit.
As mentioned in a earlier comment, we have a really good job market across the board. We saw in previous downturns significant job loss.
Still have a shortage of housing stock in many places … people need to live somewhere.
BUT here’s the difference maker. Since the mid 80’s, interest rates have been steadily falling. This has been really good for the movement of capital. Refi’s were huge to the movement of money when sales fall off. Today just about everyone with a mortgage is sitting on a very low 3. something or low 4’s mortgage with no need or incentive to refinance.
So if sales fall off, refi falls off, foreclosures not the factor as in the past, then you have the movement of capital slowing to a crawl. And that is the unknown at this point. Money only works when it’s moving. If the FED comes through on their threat to move rates further north a couple times this year, then we are in unchartered waters. It will be interesting to see where this goes. Enjoy the ride!
Don’t see a crash. Very exagerated. Like some of said above, correction definitely. Big banks making a comeback, highly doubt it. Buyers are still flinching from the biggies and don’t trust them.
Thanks for finding and reviewing the report. I would love to see the data by MSA. Curious as to Denver Colorado market.
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