| PROSPERITY PUB MARKET TALK
Housing Prices Tumble: Crash or Correction?
Homebuyers hoping for a significant price drop might be disappointed. Over the past 18 months, housing prices have indeed experienced a sharp decline – nearly 15%.
This drop is even steeper than what we saw during the peak of the 2007/2008 housing crisis, where prices ultimately fell by 19%.
The key difference lies in the speed of the decline. Back then, it took a full two years for prices to reach that bottom. In this case, the nearly 15% drop has occurred in a much shorter timeframe — just 18 months.
It’s particularly evident when you look at the steep slope of the decline in this chart:
 |
With such a big, fast decline, we thought to ourselves:
Are we witnessing another housing crash?
We reached out to our resident market expert, Geof Smith, to get his insights.
"Is housing crashing? No," says Geof.
He goes on to tell us that currently, there's a critical factor missing from the equation we saw in 2008: a lack of supply.
Back then, there was an overabundance of homes on the market, leading to a freefall in prices.
Today, the housing market faces a persistent shortage of available properties.
Geof went on to highlight another key factor: immigration.
"The US government has welcomed a significant number of immigrants in recent years – roughly 12 million since the pandemic began. These individuals need housing, and that demand will continue to support housing prices, rents, and the construction of new homes."
But still, we had to press him about the current drop we’ve seen. What’s up with that?
Geof pointed to a common complaint among homebuyers: affordability.
The median price for a home right now sits around $385,000, which can be pretty expensive for a median household income of $74,000.
“So it might help drive housing prices a little lower but after housing has gone up 80% in the last 4 years, a 30% would be nothing.”
The takeaway?
While housing prices have experienced a notable decline, a full-blown crash seems unlikely due to the current supply shortage and ongoing housing demand.
Yet, affordability remains a significant challenge, potentially leading to a further, more measured price adjustment in the future.
How To Play It
Geof went the extra mile and gave us a free trade idea, including exact options criteria.
You can grab it — absolutely FREE — inside Geof’s Telegram channel. Click here to join.
— The Prosperity Pub Team | | | | |
|
|
0 Response to "Housing Prices Tumble"
Post a Comment