About the last thing area homeowners need now is to spend time worrying about the effect the pandemic will have on their Mesa and Delta County 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 Mesa and Delta County 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.
- 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…”
Predicting the future is, as always, more art than science—and in today’s unprecedented situation, 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 us to discuss the latest results—and opportunities—out there in today’s Mesa and Delta County market!