Posted by Matt Curtis on Tuesday, July 12th, 2022 10:52am.
It's all over the news, “When will the real estate market crash?” As the owner of Matt Curtis Real Estate, the largest real estate team in Alabama, and a real estate investor, the status of the U.S.'s real estate market, it's a topic that I think about often.
I started Matt Curtis Real Estate during the once-in-a-lifetime 2008 market crash. Parts of me actually want to see prices come back down; as both an investor and also to help millennials out in getting their first home. We're going to have big challenges ahead as a nation if we become a nation of renters.
On a positive note, I believe that home values will start to slow down their appreciation rates despite values continuing to rise. The reason why is that we have a 5+ million home deficit in this country. New construction is starting to slow down nationally, and we won't be able to cut into this deficit any time soon. It's not feasible for real estate prices to lower when there's a housing shortage.
Home prices have only crashed one time in the last 120 years, which was in 2008. And 2008 was not even a housing or real state market crisis, it was a financial crisis. Bad loans were offered to, and used by, unqualified borrowers. We do not see this particular financial crisis happening today. Borrowers have a 55% loan to value ratio versus 85% back in 2008. Crashes happen when there's no built equity and people are being forced to sell. At this present time, homeowners have both equity and low-interest rates. Homeowners are not forced to sell their homes with low interest rates and equity.
Finally, with our fiat money system, we've had 40% of the US dollars printed in the last 24 months. In reality, we have not seen real estate price appreciation. What we have seen is dollar devaluation.
I know it's common to hear about a real estate crash is coming. A lot of our nation's population would like to see a real estate market crash; therefore, are not learning the facts regarding the current state of our real estate market. However, I don't see prices coming down and I'm actually putting my money where my mouth is by continuing to buy real estate during this time.