pandemic will have on their Boise home values. Given that memories of the Great Recession have yet to
fade, a replay of that decline in home values might seem logical.
So, it was reassuring to read Claire Trapasso’s calming analysis pointing out the multiple reasons
why a housing crash is viewed as highly unlikely in today’s circumstances. Professor Trapasso’s analysis
highlighted a number of points, including these five:
- Mortgage Stability. Housing market fundamentals “couldn’t be more different” than those that prevailed in the 2007-2009 meltdown when “just about anyone could get a mortgage.” Today, stricter borrower qualification requirements have measurably lowered risk levels —so massive numbers of bad loans are highly unlikely.
- Tame ‘Flipping.’ The rampant home flipping and widespread speculation that fed the 2007 meltdown is simply not a factor threatening Boise home values.
- No Overbuilding. Today’s U.S. housing market is characterized by a widespread shortage of inventory—the exact opposite of previous overbuilding, which previously exerted downward pressure on home values.
- Interest Rates. Home loan interest rates at historic lows continue to create affordable monthly payments that support higher price levels.
- Demographics. Even now, demand for new homes “hasn’t evaporated” because there are simply too many would-be buyers out there: “millennials eager to put down roots and start families...”
that’s still true. A slowdown in price hikes may be likely (that’s what realtor.com’s chief economist says)
—but a host of housing fundamentals make another wholesale meltdown unlikely. Call me to discuss the
latest results—and opportunities—out there in today’s Boise market!
