58% of Homeowners See a Drop in Home Values Coming

    According to the recently released Modern Homebuyer Survey from ValueInsured58 percent of homeowners think there will be a “housing bubble and price correction” within the next 2 years.

    After what transpired just ten years ago, we can understand the concern Americans have about the current increase in home prices. However, this market has very little in common with what happened last decade.

    The two major causes of the housing crash were:

    1. A vast oversupply of housing inventory caused by home builders building at a pace that far exceeded historical norms.
    2. Lending standards that were so relaxed that unqualified buyers could easily obtain financing thus enabling them to purchase a home.

    Today, housing inventory is at a 20-year low with new construction starts well below historic norms and financing a home is anything but simple in the current mortgage environment. The elements that precipitated the housing crash a decade ago do not exist in today’s real estate market.

    The current increase in home prices is the result of a standard economic equation: when demand is high and supply is low, prices rise.

    If you are one of the 58% of homeowners who are concerned about home values depreciating over the next two years and are hesitant to move up to the home of your dreams, take comfort in the latest Home Price Expectation Survey.

    Once a quarter, a nationwide panel of over one hundred economists, real estate experts and investment & market strategists are surveyed and asked to project home values over the next five years. The experts predicted that houses would continue to appreciate through the balance of this year and in 2018, 2019, 2020 and 2021. They do expect lower levels of appreciationduring these years than we have experienced over the last five years but do not call for a decrease in values (depreciation) in any of the years mentioned.

    Bottom Line

    If you currently own a home and are thinking of moving-up to the home your family dreams about, don’t let the fear of another housing bubble get in the way as this housing market in no way resembles the market of a decade ago.

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    Danny Cheung

    I spent over twenty five (25) years with the Department of Defense in the hardware/software design and development as well as program management prior to joining the Group in a full time capacity. I am thrilled to put my years of experience as an Electronics Engineer to assist and lead our Real Estate Group to the next level. I am committed to establishing the tools and resources necessary for our team members to work more seamlessly and effectively thus ensuring our clients full satisfaction. My wife and I have two daughters and a dog (he's more like our son). I enjoy travelling and watching sports especially football…Go Skins!

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