“A real estate bubble is generally caused by unjustified speculation in the housing market that leads to a rapid and unsustainable increase in prices.”
Home prices increased 15% in 2003, 20% in 2004 and 21% in 2005. This absolutely was a period of “unjustified speculation.” After the Mortgage guidelines tightened and the demand drop…so did the home prices.There is no denying that home prices in Washington have risen over the last fews years, causing the concern of affordability for First Time Home Buyers. We do not have the same “Supply & Demand” situation we had back then.
The statistics for home sales this year in the Washington State show the numbers will be virtually identical to the that which sold in 2003. There have been notable demographic shifts — people are waiting to marry, start families and branch out into the world. Even with the low interest rates we are seeing now, it is much harder to qualify for a loan. So in short, demand is reasonable and not being fueled by speculation.
As long as a Market is not artificially stimulated it will balance over time. I’m not saying that our market won’t balance, but it may take longer than you think..if you are toggling with the idea of buying…DON’T WAIT, home prices and values will only continue to rise.
Imagine what your house would be worth today if you had purchased even just a year ago?