To determine whether we’re headed for another bubble, it’s important to recognize how today’s market differs from what we saw between 2008 and 2013.

Recently, you’ve probably heard talk of a housing bubble on the horizon. But is this true? 

Before we can answer this, it’s important to realize where such speculation comes from. To begin, the United States’ overall market has experienced 50 consecutive months of appreciation since the all-time low we saw in 2012. This is a staggering statistic. 

Also, while certain conditions may vary, our local markets tend to reflect national trends, and this streak of rising values is no exception. Sure enough, values are increasing and supply is dropping in our Cumberland County market, where inventory is down by 45% year over year.

“Though prices may be increasing by the month, today’s market is a far cry from the previous bubble.”

All of these conditions may appear to indicate a housing bubble, but here’s the catch: These annual increases in home values aren’t being driven by faulty mortgage products, as was the case a decade ago during the recession. Instead, this continuing appreciation is more likely fueled by our severe housing shortage, slower new construction starts, and all-time low interest rates. 

In summary, though prices may be increasing by the month, today’s market is a far cry from the previous bubble. Experts do predict a market slowdown in the near future, yet conditions are unlikely to mirror what we saw between 2008 and 2013. 

If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.