“When Will the Bubble Burst?”

A prospective seller said to me last week “We want to place our home on the market just before the burst of the real estate bubble.”.   Some people in real estate may be tempted to ask, “What bubble?”.   I mean no sarcasm in posing the question.  The reason for the question is, for the most part, the Capital Region real estate market, historically, does not experience the highs and lows of larger real estate markets such as New York City, Boston, the larger real estate markets found in the states of California, Texas, Florida, Arizona, and others.  The Capital Region real estate market tends to be “stable” as it relates to real estate values.  

Since I have been a licensed real estate broker, the great recession of 2007 – 2008 was the only time real estate prices across the nation went down.  Even then, the real estate market slide began on the West coast, migrated across the country and arrived on the East coast one year later.  Once the great recession of 2007- 2008 began to impact the Capital Region real estate market, the affects on values were only in the low single digits.  Contrast that to Las Vegas, whose residential real estate market values during the Great Recession plummeted by nearly 60%.

A measured point of view of the Capital Region real estate market is not seen so much as “a real estate bubble bursting”, so much as a consideration of when the economic cycle will naturally shift.  At some point in time, as more houses enter the market for sale, the double-digit appreciation will slow, the dominance of multiple offers will naturally wane, and there will be a greater balance experienced between buyers and sellers of real estate. 

The simple truth behind the “sellers market” of the Capital Region – and, indeed the nation, is found in the clarity of understanding the principle of supply and demand.  As the real estate market stands as of this writing, there is more demand (Ready, willing and financially able home buyers) than there is supply (an adequate number of homes actively being marketed for sale). 

A home buyer may face the challenge of finding the right home given the number of homes that are currently offered for sale.  Yet, a home buyer in the market right now will benefit from mortgage interest rates near historic lows.   

A prospective home buyer said to me recently “Well, I’ll just wait out the market until things settle down.”.  Someone can do that, certainly.   Yet, if a homebuyer decides to wait for prices in the Capital Region real estate market to decline – or, plateau - prices are increasing everyday they wait.

If you would like to know the value of your home, visit "Sellers" in the main navigation above.  

If you like to follow the local real estate market, I post “Market Insights” on Facebook on the 4th of each month.  You can also click “Market Insights” in the main navigation above.