Reali Roundup: 🏠 Are We in a Housing Bubble?

California’s numbers are in, and though home sales dropped 2.7% from April to May, prices continued to soar, hitting another all-time high, with median home prices reaching $818,260 across the state (up 39.1% from May 2020). Could all this be pointing to a potential slowdown in demand? Here’s the breakdown:

California May 2021 Sales Stats

• Median time on market: 7 days
• Homes sold above asking price: 70.7%
• Unsold inventory index: 1.8x months

With median home sales prices at a record high, you may wonder if we’re in a housing bubble. Here are three reasons why experts think today’s market is radically different than in the 2000s:

Lack of supply. With only a 2.5-month supply of national inventory for single-family homes in May, more buyers are finding themselves in bidding wars and seeking new ways to get their offer accepted. As Lawerence Run, chief economist of NAR put it, “This is not a bubble. It is simply a lack of supply.”

Low mortgage rates. While rates have ticked up lately, there are no signs of a spike that could halt the home financing process. Even if rates reached 4 percent, they would still be very low historically.

Greater equity. Unlike the 2008 recession, homeowners are in a much stronger position, with one in three of the 55.8 million mortgaged homes being equity-rich.

As you gather with your friends and family to celebrate America’s 245th birthday, let’s remember all of the past heroes who fought for our freedom and unity. Have a safe and festive Independence Day, and see you in two weeks! 🎆