Things to Consider When Selling your House

Things to Consider When Selling your House

  • Brad Gothberg
  • 06/11/20

Why this housing market is not like 2008

There are so many questions swirling around today about where the housing market is headed amid this economic slowdown. In order to best understand the current state and how the expert projections are playing out, it’s best to look at our economic history, and how today is vastly different than the housing crisis of 2008, known as the Great Recession. Many of us experienced financial hardships, lost homes, and were out of work during the Great Recession – the recession that started with a housing and mortgage crisis. Today, we face a very different challenge: an external health crisis that caused a pause in much of the economy earlier this year and a major shutdown of many parts of the country. We’re simply not in the same boat as we were then, and here are five big reasons why that can give you greater confidence if you’re thinking of selling your house this year.
1. Appreciation
When we look at appreciation in the visual here, there’s a big difference between the 6 years prior to the housing crash and the most recent 6-year period. Leading up to the crash, we had much higher appreciation in this country than we saw coming into this year. In fact, the highest level of appreciation most recently is below the lowest level we saw leading up to the crash. Prices were rising going into this economic slowdown, but not at the rate they were climbing back when we had runaway appreciation.
2. Mortgage Credit
The Mortgage Credit Availability Index is a monthly measure by the Mortgage Bankers Association that gauges the level of difficulty to secure a loan. The higher the index, the easier it is to get a loan; the lower the index, the harder. Today we’re nowhere near the levels seen before the housing crash when it was very easy to get approved for a mortgage. After the crash, however, lending standards tightened and have remained that way ever since.
3. Number of Homes for Sale
One of the causes of the housing crash in 2008 was an oversupply of homes for sale. Today, as shown in the next image, we see a much different picture. We don’t have enough homes on the market for the number of people who want to buy them. Across the country, we have less than 6 months of inventory – an undersupply of homes available for buyers.
4. Us of Home Equity
The next chart shows the difference in how people are accessing the equity in their homes today as compared to the period leading up to the housing crash. Back then, consumers were harvesting equity from their homes (through cash-out refinances) and using it to finance highend lifestyles. Today, consumers are treating the equity in their homes much more responsibly.
5. Home Equity Today
Today, 58.7% of homes across the country have at least 60% equity. In 2008, homeowners walked away when they owed more than what their homes were worth. With the equity homeowners have now, they’re much less likely to walk away from their homes.

Bottom Line

If you’re considering selling your house to make a move this year, there’s no need to fear the market. We’re not in a housing crisis, and this is nothing like 2008.
Click here to view the full article.

Work With Brad

Brad's commitment to his clients includes: full-service marketing plan for his seller, full-time team working for you, complete follow through and communication with his client's needs, a monthly publication of Alamo Today to all his clients covering the Real Estate market. Call Brad at (925) 998-5151.