What’s The Tea With 4D? 🍵

Hello friends!

I am thrilled to kick off a fresh new segment – "What's the Tea with 4D" – in this week’s newsletter! Now, let's address the burning question on everyone's mind: What exactly does "tea" mean? Well, I’m glad you asked!

According to the oracle of modern lingo, Urban Dictionary, "Tea" is slang for spilling the beans on juicy details about a person or situation. And can you guess what our juicy situation is? Drumroll, please 🥁 – it’s our local real estate market!

But hold onto your hats, folks, as the excitement doesn't stop there. Many fascinating things are happening right now, and I can't wait to share them with you in the upcoming weeks. 😎

This space will be filled with a mix of local market insights, life lessons, profound explorations, and just some good ol' musings. Stay tuned! ✨

My New E-book is Now Available! 📘

I'm beyond excited to share that my new E-book, 'Find Your Flow In Real Estate,' is now officially live on Amazon! Tailored specifically for both new and seasoned real estate agents, this guide is packed with practical tips to help you thrive in the industry while keeping stress at bay.

Authored by yours truly, it features invaluable insights and strategies to assist agents in finding their flow in the dynamic world of real estate. Whether it's managing stressful negotiations or handling unexpected challenges with ease, this guide will equip you with the right tools to confidently navigate any situation.

Even better, I'm offering a special free promotion exclusively on Amazon until Saturday, March 16th! And who doesn’t love free stuff?

Don't miss out—use the button below to claim your copy today and start elevating your real estate game. 💥

Unlocking the Truth: Finding Stability in Today's Housing Market 🏘️

If you’re holding out hope that the housing market is going to crash and bring home prices back down, here’s a look at what the data shows. And spoiler alert: that’s not in the cards. Instead, experts say prices are going to keep going up.

The present market differs significantly from its pre-2008 state, owing to the housing crash. Today, we will discuss several factors contributing to this shift.

It’s Harder To Get a Loan Now – and That’s Actually a Good Thing!

It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one.

Things are different today. Homebuyers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is:

The peak in the graph shows that, back then, lending standards weren’t as strict as they are now. That means lending institutions took on much greater risk in both the person and the mortgage products offered around the crash. That led to mass defaults and a flood of foreclosures coming onto the market.

There Are Far Fewer Homes For Sale Today, So Prices Won’t Crash Anytime Soon

Because there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), that caused home prices to fall dramatically. But today, there’s an inventory shortage – not a surplus.

The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now (shown in blue) compares to the crash (shown in red):

Today, unsold inventory sits at just a 3.0-months’ supply. That’s compared to the peak of 10.4 month’s supply back in 2008. That means there’s nowhere near enough inventory on the market for home prices to come crashing down like they did back then.

People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

Back in the lead up to the housing crash, many homeowners were borrowing against the equity in their homes to finance new cars, boats, and vacations. So, when prices started to fall, as inventory rose too high, many of those homeowners found themselves underwater.

But today, homeowners are a lot more cautious. Even though prices have skyrocketed in the past few years, homeowners aren’t tapping into their equity the way they did back then.

Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has actually reached an all-time high:

That means, as a whole, homeowners have more equity available than ever before. And that’s great. Homeowners are in a much stronger position today than in the early 2000s. That same report from Black Knight goes on to explain:

And since homeowners are on more solid footing today, they’ll have options to avoid foreclosure. That limits the number of distressed properties coming onto the market. And without a flood of inventory, prices won’t come tumbling down. 

Bottom Line

The housing market isn't heading for a crash, and here's why: most experts now think we won't have a recession in the next year. And they also don't expect a big jump in the unemployment rate. Today's tougher loan standards prevent the risks seen in 2008.

Unlike the surplus back then, we now have a shortage of homes for sale, keeping prices stable. Homeowners are smarter with their equity, avoiding the pitfalls of the past.

Let's chat over coffee to discuss more details and address any questions you may have about local real estate. Your first cup is on me! ☕️

Click below to book a date and time that works best for your schedule. After booking, I'll reach out to confirm the location. I look forward to connecting with you soon! 😊