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    Rumors Of A House Market Crash

    Rumors of an impending market crash have been a hot topic as of late, but are they true? Actually, there are several key indicators that a housing crash may not be on the horizon after all.   

    First, although our market does share certain similarities to the conditions we saw in 2005, the differences between these two points in real estate history are even more significant. In 2015, 20% of the market was comprised of subprime loans, totaling more than $620 billion overall.

    A decade later in 2015, just three short years ago, the percentage of our market dominated by subprime loans was vastly diminished—totaling to a comparatively minor sum of $56 billion and accounting for just 5% of the market.

    Another major area of change comes from the fact that lending standards have increased. CoreLogic’s Housing Credit Index reports that loans originated in 2016 were of higher quality than any filed in the last 15 years.

    Tightened lending standards have also impacted investors looking to fix and flip—a real estate technique which contributed to our previous market crash. Currently, lenders only finance 55% of home value in the “flip” market. This is a major shift from the 80% or more banks lent out during the subprime crisis.

    Next, the average FICO score across the US has also gone up, moving from between 490 to 510 in 2001 to an average score of 686 in 2009, according to the Fair Isaac Corporation.

    Under the influence of these and other factors, fewer homes are selling overall in recent times. Recent reports indicate that approximately 64% of Americans today own homes, versus the 68% who owned property in 2007.

    Many speculate that this is at least partially due to the fact that, between 2012 and 2017, home prices have risen 6.5% per year on average, and surpassed their 2006 peak as a result.  However, these increased prices actually indicate an adjustment for the 11 years of inflation we’ve seen.

    The bottom line is this: Despite recent conjecture, a market crash may not be imminent, after all.

    If you’re ever in need of a trustworthy real estate agent, my doors are always open. You can also give me a call at 210-908-7800. I’ve worked in the Central Texas & San Antonio area for a long time, and I can give you the contact details for my previous clients so you can check what their experiences have been.

    And if you’re only just considering selling your home, you might be interested in finding out what your home is worth in the current Central Texas & San Antonio market:

    Click here to find out the value of your home.

    On the other hand, if you’re looking to buy, take a look at all the great homes that have recently come on the Central Texas & San Antonio market:

    Click here for all Central Texas & San Antonio homes for sale. 

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