As renters with a growing family, we envision owning a country side home one day. However, with the rising home prices it seems that dream is being postponed. To some this might be discouraging, but to us it’s test of patience. After all what goes up must come down and the housing market is no exception. There’s little doubt in my mind that we are nearing the top of the market:
Meanwhile, U.S. housing prices have finally eclipsed their peak from 2005 in the years leading up to the Great Recession. Note that at the beginning of 2021, we said real estate was entering the year in a “massive bubble”.
A combination of low interest rates and trillions in freshly printed dollars has led to the the median price of a single family home rising 14.9% to $315,000 in Q4. It was “the biggest surge in data going back to 1990, according to the National Association of Realtors,”
Anybody who wanted to leave the city has probably done so by now. This will lower the demand causing prices to naturally fall. Also, unemployment rates will only rise if small businesses keep closing for a cold and sniffles. One year before the great recession housing prices reached their peak at $314,000. Then prices fell by 33%. The difference this time is that nearly everything in is a bubble, and there will probably be a dollar crisis too. Therefore, the housing prices may fall lower than 33%. Needless to say, there’s opportunities coming for those prepared.