Will the Southwest Florida Real Estate Market Crash in 2021

Will the Southwest Florida Real Estate Market Crash in 2021

This month’s video series is “What to expect in the Real Estate Market of 2021. Are we going to see a crash???  

With bidding wars and lack of inventory many people are asking if the market will crash. You  know the saying, what goes up must go down. I understand how scary it may be thinking about  what to do, I’m in the market just like you.  

John Garuti with JG3 Homes Brokered by eXp Realty. Now I’m not going to sugarcoat it, this is  a very unpredictable time but let’s truly compare what happened back in 2006 when we  experienced one of the biggest crashes in American history.  

According to the National Association of Realtors Chief Economist Lawrence Yun,  

Lawrence Yun

“ Such a frenzy of activity, reminiscent of 2006, raises questions about a bubble and the  potential for a painful crash. The answer: There is no comparison. Back in 2006, dubious  adjustable-rate mortgages taxed many buyers’ budgets. Some loans didn’t even require income  documentation. Today, buyers are taking out 30-year fixed-rate mortgages. Fourteen years  ago, there were 3.8 million homes listed for sale and home builders were putting up about 2  million new units. Now, inventory is only about 1.5 million homes, and home builders are  underproducing relative to historical averages.”  

Did you catch that? he said, “There is NO COMPARISON”.  

Another major contributor to the crash of 2006 was the fact that stated income loans were being  given to buyers.  

Buyers were being qualified for a loan that they simply could not afford, and in many cases, little  paperwork was needed to qualify for a loan, someone would simply “State” what they made and  that was considered enough.  

That is NOT the case now!! Lenders go above and beyond in qualifying buyers for a loan and  making sure they have the means to pay. More stringent qualifying guidelines can give some  relief in respect to the sustainability of the housing market, 

Something else to consider is the increasing value of homes appraisals. 

One week or one month to the next, had a significant impact on the crash, that is just NOT  happening anymore.  

I feel we can all take solace knowing that there are many more factors that lead to the crash of  2006 that we are just not seeing in the current market.  

John Garuti with JG3 Homes Brokered by eXp Realty and we’re always here to help. Reach out  anytime even if you’ve just got questions. 

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