Why the Real Estate Market of 2018 is not the Same as 2007…Part 1
Westcoe Realtors, Riverside Ca…It seems like in today’s world, when things are going really well, there is always someone who wants to play the “doom and gloom” card. We suppose this started with Henny Penny and the “sky is falling”, but no matter the situation, you can always find someone who insists the glass is half empty.
In real estate, we are always surrounded by “experts” who, from a chair far removed from the action, insist on telling anyone who will listen why the “sky is falling” and how we should all head for the hills. However, here at Westcoe Realtors, we have been successfully been selling real estate for 33 years and our views are right from the trenches of doing business every day….so while some of the real estate experts are shouting negative comments about our housing market, let us tell you why 2018 is not even close to being 2007.
First…our economy is roaring, and the unemployment numbers are the best they have been for the past 17 years. Lots of jobs and lots of people working does not equal the real estate crash of 2007. California unemployment figures are currently at 4.0%, which is a far, far cry from the 6.1% of 2007. In fact, this unemployment number has fallen rather steadily, and there is nothing on the horizon that indicates these numbers won’t continue to drop. On the contrary, they keep improving every month, and as long as people have jobs, then housing will continue to be strong. So…of all the things you may have to worry about when it comes to housing, take jobs off your list. Strong jobs equals a strong real estate market.
Secondly…our current real estate market has not been propped-up by a ton of ‘funny-money’ loans, like they were in 2005-2007. Back then, the financing was ridiculous, with 100% financing loans being given to buyers who barely had a job. Wall Street then ran amuck with these no-equity loans until the entire house of cards was destined to fall…and they did. Like dominoes, the crash took out everything that touched home loans and real estate. Today, our financing guidelines are designed to prevent this from happening again, and there are no more loans given to non-qualified buyers. There are still low down payment loans, but the qualifying process is based upon facts, not wishes. Add to that the increased regulations regarding the lending industry, and nothing here looks anything like 2007.
There are a couple of other major reasons keeping us from looking like 2007, and please check back with us next week for those, as we don’t want to make this blog too long. Simply rest assured that our real estate market looks strong for 2018, and we will expound on the other two reasons for us to feel this way next week.
Take care, and thanks for reading.