Everyone talks about the real estate bubble like it is a real, living human being. They talk about it like this “bubble” has a mind of its own. When I look at the statistics, it looks like things are not going to “pop”, they are just going to settle down. Here are some statistics to substantiate that things are definitely settling down.
This comes from the National Association of Realtors:
- From Oct. 2004 to Oct. 2005 — Single family homes on the market increased from 4.3 million to 5.3 million. Basically, the supply is rising significantly, but the demand is not
- From Oct. 2004 to Oct. 2005 — The change in number of homes sold went from 6.3% to 3.3%
- From Oct. 2004 to Oct. 2005 — Some hot markets have cooled down in value appreciation. Las Vegas went from 53.7% increase to 10.5% increase in value. San Diego went from 32.5% to 6.3% in value
What does this tell us? This does not tell homeowners to jump ship and sell their house right away. It DOES tell investors to rethink the idiotic leveraged investments they made. Do not let the market dictate the decision to sell or buy a home rather than personal reasons such as a new baby on the way, change in job, or early retirement.