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Friday, May 11, 2018

Is it time to talk "Bubble"?

After a read of the opinions and analysis of Leslie Appleton-Young, Chief Economist for California Association of Realtors, you may feel more like buying or selling that home you've put off.  No, she concludes, the triggers of a bubble-burst are not imminent, yet, the typical underlying reasons for a market slide are a possibility.

We Realtors do get asked this question often, though I think many haven't been through a business version of the economy collapse and may not really have opinions; but I certainly do.  I am in agreement with Leslie.  Increased interest rates were one of the straws that broke the camel's back in 2006, and I know that any jump in rates will cool our market.  Even now, agents across the country (based on my own cross-sampling with a large network I interact with) are lamenting the slowed market activity that has been our 2018 market so far.

Of course, Appleton-Young does a beautiful job of presenting historical data running through the past couple of decades of market cycles, and the analysis is readily digestible.  She does--as I and other Realtors do--acknowledge the rising home costs and she notes that, adjusted for cost of housing, Californians' typical home payment cost on a median-priced home is only at 55%; slightly above its usual average percentage of 50%, and substantially lower than the 90% Californians were paying of their household income in 2006.

She comments on the relative FICO scores that are related to loans obtained (a vague reference to the loan oversight that is in place now, versus that in the early 2000's, I inferred).

If you'd like to read the entire report, I have it in PDF format and would love to share it with anybody interested,  Simply email me at Nikki@GoldRushGroup.net.  Or, if you prefer, hit me up by text and let me know where you'd like the report sent.  You can also visit our web site to view and search listings or read about our team.

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