Given recent changes in the market, it may be tempting to think back to the infamous housing market crash in 2008. While news of an economic slowdown may be concerning, the data shows that the situation today is nothing like it was in 2008. 

Even though the recent market has become seemingly "slower," it is actually stabilizing from the insanely competitive market during "COVID times." Right now, inventory is still low and homes are in demand. Sure, the open house lines and bidding wars may be less cutthroat, but the demand for homes is here to stay.

In order for the housing market to crash, history has shown that ther must be an oversupply of homes. Today's market has shown that inventory continues to be in short supply. In reality, there are only 3 sources for homes to become available on the market: 

1. New homes and construction
2. Foreclosures and short sales
3. Current homeowners reselling their homes

Resale Homes On The Market

Altos Research has found that, while the housing supply is suspected to increase over this year in general, the current inventory in August 2022 is still down by 42.6% in comparison to August 2019! So, while the recent shift in the market may come as a shock to realtors, homebuyers and sellers alike... it's merely a sign of restabilization.

New Construction

When it comes to new construction, many homebuilders are making a conscious effort to keep up with demand without overbuilding. Recent data provided by the U.S. Census also states that roughly 1.4 million homes will be built this year. While 1.4 million new homes will increase inventory, it won't contribute to an overstock of homes in the market.

Short Sales and Foreclosures

Lastly, lending practices across the board during the 2008 housing crisis weren't nearly as strict as they are nowadays. Banks were frivolously lending money to homebuyers who couldn't afford their payments, leading to an overflow of short sales and foreclosures. While the parameters for being qualified for a loan still vary between banks today, the regulations are more rigorous to prevent the same mistakes that were made in 2008.

When it comes to predicting the future, we must look at the past. While history has a sense of repeating itself, that's not the case for the market today. The compilation of data by experts in both our industry and governmental organizations points to an expected increase in inventory, but not an oversupply. So, if you're looking to buy or sell your home today... there's still no time like the present! If you're still not convinced, check out the benefits for both buyers and sellers in the current market by reading our blog here: What To Expect In The Shifting Real Estate Market