Home sales dropped in the year 2020 due to the coronavirus pandemic and the housing sector dealt with severe blow. The real estate and housing sector was no exception for the pandemic and grew worst of its history. Thanks to vaccines, the economies are reemerging now in many countries. And likewise, the United States is also seeing very good progress.
In the US, in April 2021, “When is the housing market going to crash” was one of the trending topics. And people searched it frequently on Google. It jumped 2450 percent compared to the previous month and one can estimate the severity of matter from this. The search terms “should I buy a house” and “sell my house” also reached record interest.
This New York Times story about surging home sales in United States tells that nervous buyers and sellers are asking: ‘When is the housing market going to crash?’. The median sale price of an existing home in the U.S. was $313,000 in February. This is nearly 16 percent higher from a year earlier, when a 3 to 5 percent annual increase is considered healthy, according to a report from the National Association of Realtors, a trade group.
In the opinion of Jonathan J. Miller who analyzes markets nationwide and is an appraiser based at New York, it is on everybody’s mind and for him, how long will it last depend upon where you live. And also, another factor, he cites, is the extent to which pandemic changes the buying patterns.
The NY Times story further adds that “What awaits at the end of this frenetic period is not likely to resemble the 2008 housing bubble, which brought on a drawn-out crash when it finally burst, they said. Today’s supercharged market has been caused by pandemic forces that have challenged other assumptions about the market. Even as the pendulum has swung toward increased demand in suburban markets, cities, too, are surging”.
We can comment that during this pandemic, priorities will hinge on soaring mortgage rates and incredibly tight inventory in some markets. And this will likely keep demand strong through the rest of 2021, even as price growth moderates. Several analysts have also eyed this factor. In 2008, we also saw a housing bubble and the current situation is also a resemblance to that.