Will This Real Estate Market Finally Crash 2022 | Will The Bubble Burst?
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This is a question I hear about all the time, Will this real estate market finally crash in 2022? Will the bubble burst in 2022? Which is a legitimate concern as this market is putting up some really record breaking numbers. The sales are high, inventory is low, buyer demand is high and prices are rising at a record pace. It will only make sense for people to ask if this real estate market will finally crash in 2022.
Record Years
The past three to four years have been extremely hot, very much above average and record setting in many ways. Those records have continued to be set in this strong real estate market. Many economist will tell you that many things in the economy can be cyclical so it would only seem obvious to think we are up for a real estate market crash. The last real estate crash was caused by bad lending practices, of which do not exist today. So what could give to keep this year from being a record year in the real estate market?
Inventory
There are so many factors that have caused the surge in the real estate market for the past few years but inventory has been a big factor. The inventory problem has been going on for much longer and in the past few years has caused the prices to increase. As anyone who has taken an economics class the idea behind supply and demand is when there is a short supply and the demand is high, prices go up. That is where we have been for the last few years and I see the real estate market continue to have the shortage of inventory. I don’t see a solution to the low inventory problem anytime soon. Builders can not keep up due to shortage of labor, a supply chain that is not dependable, demand is high and prices for more land is high. All these factors lead me to believe the inventory in the real estate market for 2022 will continue to have a low inventory of homes to sell.
Demand
Buyer demand in the last 8 years has been strong and the last three years have been really at the peak. With a good economy in place here in the Dallas Fort Worth area, buyers have felt very good about purchasing a home and making the long term commitment. What has been a bit of a surprise is how much the buyers have been willing to pay to get in to a house, many times over asking and appraisal. With the economy still strong overall, I expect the real estate market to continue to have a strong demand from buyers and cause the real estate market to continue to be hot.
The US Federal Reserve has indicated rates would be going up in 2022 and have already started going up. The 2022 real estate market will certain have some sort of reaction to these, which is why I think it will slow appreciation compared to last year. However I still think it will be a strong market with no real estate crash in 2022.
I have no reason to believe the real estate market will crash in 2022. I don’t believe there is a bubble to burst. However I do believe this year may not be a record breaking year but it will still be a very strong market. The real estate market going in to 2022 is still too strong to be anywhere near a normal market, much less a real estate market crash in 2022. So I expect a strong year, maybe not record setting, and maybe cooling off, but still a good year but certainly not a real estate market crash or a bubble bursting in 2022.
With the heart of a teacher I seek to educate my clients about the process of buying, selling or renting real estate. I strongly feel an informed and educated consumer will be more confident & make better decisions.
Have questions about this or other topics, do not hesitate to contact me.
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Luis is a Dallas/Fort Worth area Realtor and Broker for Serve Realty. He enjoys the Dallas/Fort Worth area, houses, and helping clients buy and sell real estate.
Email: Luis@ServeRealtyTx.com
Call/text me if you are looking to buy / sell a home in the Dallas Fort Worth and surrounding area! 214 783-0535
Luis Cuevas, Broker/Realtor®
Serve Realty
(214) 783-0535
Luis@ServeRealtyTx.com
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