By Jeff Martel, Broker of Better Homes and Gardens Real Estate 43 Degrees North
One chart that explains how we will not be seeing 2008-2011 anytime soon… we are living in truly unprecedented times… never before has there been so much equity built into the homes - this chart goes all the way back to the 1950’s and you can see that never before has this much equity existed. And since this isn’t the norm… you should probably expect the unexpected.
But for now, these are the truths:
1) American homeowners are in an incredibly strong financial position.
2) You can expect equilibrium to find its way back into the market - either through prices falling, or debt increasing (Think HELOC’s or refi’s) - somehow this will find its way back to the mean - but that will take years to find.
3) Even if a massive recession hits… this chart shows you we can’t expect a replay of 2008 to happen - distressed sales are unlikely - even if owners are forced to sell from recessionary layoffs - they are in a fantastic position to endure that forced transaction and come out ahead.
The market may feel a bit slow at times… but you have to realize just what an incredible situation we find ourselves in. The market itself is so strong with such depths of equity - we are in many ways protected from a mass sell off or glut of distressed inventory. Slow and steady is way more fun that chaotic and destructive… so enjoy it - its never been like this before!
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