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Q: Should You Be Worried That Our Market Is in a Bubble?

Despite what you may have heard, our market is not in a bubble.

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Is our real estate market in a bubble?

Let’s refer back to the last market bubble we saw in 2008 and make one thing clear: This is not 2008. Leading up to that situation, people were getting mortgages without any proof that they could afford them. They could get stated loans for practically nothing.

Specifically, too many buyers relied on 80/20 loans. Those loans matured in five years, and at the end of that period, those people had no equity, couldn’t refinance, and couldn’t pay their note because it often doubled. Nowadays, you have to prove that you deserve a loan. You can’t just get a loan by stating that you make X amount of dollars per year.


There’s plenty of evidence to prove this market is not like that of 2008.


The main difference between 2008 and 2020, though, is that people actually have equity in their homes. More than 30% of homeowners have a large amount of equity, and just about all homeowners have some equity. In 2008, many people could pay for their homes but wouldn’t because their mortgage situation was upside down. There were so many properties being foreclosed on in their neighborhoods that they decided they didn’t want to be there anymore and just walked away.

Just the other day, I heard a TV celebrity (who shall remain nameless) advise people to wait to buy due to what happened in 2008. I say do your homework, because this is not 2008. There’s a shortage of inventory and people are buying homes. Before they do that, though, they have to prove that they qualify by verifying their employment status and ability to afford their down payment. For those using 100% financing, they also have to prove that they’ll continue to be employed where they are. Lenders are even calling on the day of closing to ask buyers about their future employment at their company.

The bottom line is, there’s plenty of evidence to prove this market is not like that of 2008.

If you have more questions about our real estate market, don’t hesitate to reach out to me. I’d love to help.

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