In its recent surveys related to today's housing market, Zillow found that—due in part to record-breaking home value appreciation—Americans fear another housing market crash, but the financial experts there—based on data from Zillow's studies—say today's environment differs fundamentally from what was seen in and around 2008.
"Today's rapid rise in prices may recall that of the mid-2000s, stoking unfounded fears of another overheated market," Zillow noted in a press release, adding that Google searches for "housing bubble" reached their highest point in nearly three years in April.
But unlike the run-up to the mortgage crisis, this market is built on strong fundamentals with long legs, Jeff Tucker, an economist at Zillow, said.
"Both of these hot markets saw extreme price appreciation in a relatively short period of time. But that's where the similarities end," Tucker said. "Unlike the combination of speculators and people spending beyond their means with non-traditional loans in 2004 and 2005, today's homebuying demand is driven by well-qualified buyers locking in traditional, fixed-rate mortgages. Builders are firing on all cylinders to meet the excess demand brought by low mortgage rates and millions of Millennial buyers jockeying for limited homes, but after more than a decade of underbuilding, homes will remain scarce until existing homeowners feel more comfortable selling or prices rise enough to restore balance."
Giant leaps in home values have not slowed the rapid pace of home sales, Zillow reported, drawing from its latest market report.
"A much-anticipated inventory rebound failed to materialize in April as the spring home shopping season arrived in full force, helping drive home value growth to new highs and accelerating an already fast-moving market," Tucker said. "And this broad-based housing strength is increasingly spilling over into the previously soft rental market."
Nationally, it typically takes seven days after listing for a seller to accept an offer, while the especially hot Midwest markets of Kansas City, Columbus, and Cincinnati are seeing listings disappear in just three days, according to Zillow.
More on themreport.com
Contact JD Homes
For more news on what's happening with the rental market, or to speak with us about our property management services, contact us today by clicking here.