Is The Market Crashing?

Hi, this is Aurora Betancourt, a San Francisco broker with marker real estate. Today I'm gonna talk a little bit about the idea that the market is crashing, that there is a crash coming soon that people seem to have in their minds about the rising interest rates. Unfortunately, the market isn't crashing. It's simply the economic factors in 2022 are a bit different than the economic factors. Weren't in 2008, for example in 2008, a lot of people were borrowing up to the maximum amount of money that they owed on their homes. Some of them up to 106%. Yes. There were banks that were lending up to a 106%Now it is pretty how do I say not difficult, but a little bit more challenging to get a home loan. So back in 2008 equity was non-existent in some of the houses that ended up having to be short-sold by the bank or foreclosed on right now in 2022 here in the San Francisco bay area.They're everyone who mostly everyone who owns a home has equity in their house, given that their loan balance maybe 25 to 30% of what their equity value is. So that's a huge difference in terms of value. So the slew of foreclosures and short sales that happened in 2008 it just can't happen in the sense that people have equity right now.And if someone were to lose their job and decide, Hey, you know what? I can no longer pay my mortgage. They can sell it. And they have equity to actually go on the market pay a realtor or broker like myself and be able to move forward. Another thing, as I mentioned previously, is that the lending standards in 2008 were completely different than they are now in 2022 for many banks.Now you need, let's say 90 days to verify assets, to be able to get a. And to be able to purchase when previously you weren't able to, like banks were not doing that. The idea of having assets three to nine months for you to qualify for a mortgage just didn't exist in 2008, some banks simply were lending on their current pay stub or basically what they had in the bank in the last two weeks.Inventory is still a challenge in the San Francisco bay area. We are seeing a change in certain areas of different counties. Inventory is opening up a little bit more. I am seeing in Contra Costa inventory opening up a little more and in Alameda, which was extremely tight back in February of 2020 shoe.And now even in Solano county, cause I have some of my buyers moving towards that. We are seeing a little bit more inventory available. So given that there's more inventory available and people are able to purchase homes, more homes than they were previously, that will move us forward to definitely more economic activity in the real estate market.Also, according to the California association of realtors, and chief economist, Jordan leaving rates will continue to rise and expect, and there's needs to be expectations for them to go up in order to curb inflation. So we are still in a very strong market in terms of real estate. Again,, no one has a crystal ball.Cause if we all had a crystal ball, we'd all be able to predict the future and be millionaires. But it is going to continue to rates will continue to rise over the next few months. And there will be opportunities for people to buy some homes in the sense that the prices will be rising shortly. And there won't be large increments of value every month that the houses go up. First-time buyers, really good time to buy also people looking to possibly downsize in the bay area. Sell that five, six bedroom home kids already went to college, looking for something smaller. There are definitely opportunities for people to be able to buy and know the market's not going to crash.There are gonna be changes in it, obviously. And hopefully, in the next couple months, there will be, it will become a buyer's market to be able to allow more buyers to buy and be homeowners here in the San Francisco bay area. So whenit comes to the market crashing, no, definitely not. The market crashed. Yes. There will be changes in the market. But we are here in a very unique place in California, the San Francisco bay area market. Some of our cities, San Jose and San Francisco are the most expensive markets in the nation. So with that, no, I don't see any market crashing, but it is important to be cautious as a consumer and definitely consider it when buying a house.If you are approved for 1.3, $1.4 million, you don't need to go up that high basically D. What house a payment you're comfortable with. What makes sense for you and your family decide whether it's time to buy a house now and stop paying your landlord.For More Information ContactAurora Betancourt, MBA, CIPSRealtor CA DRE #[email protected]