The big question I hear in real estate today is: is this a bubble? And the big statement I hear about real estate is: I’m waiting for the next crash. Well, real estate experts and most economists do not believe we have a bubble, and the next crash is unlikely to be anything like the one everyone remembers. This is because current conditions are a result of extremely low inventory. Increasing inventory by building more homes seems unlikely since we have been building like crazy for 10 years and we are not even making a dent in the available supply. The reason for the next slowdown will be rising interest rates, possible to start rising late this year or in 2022. However rising interest rates will not increase inventory but simply reduce demand. Most economist believe higher interest rates will slow the increasing value and take the wind out of the ‘crazy’ sails. Real estate still looks to be the best long-term investment, either as a homeowner or investor.
Bob Cusick, ABR, GRI
Realtypath, South Valley