Why a crash is very unlikely with our current market conditions.
Recently, a client asked me if I thought our housing market would crash this year. A lot is happening in the news, so I understand the concern. However, I don’t believe a crash is coming, and I want to share why that is.
Before I talk about 2022, I want to mention that people had similar concerns about a crash in 2021. In hindsight, we can see that instead of slowing down, the housing market took off in historic fashion. It turns out the same factors driving last year’s market are still present today.
That being said, the first quarter of 2022 has been a little unusual. Mortgage interest rates are rising, there’s a war in Ukraine, and the stock market is dropping. No one knows exactly what this means for the market moving forward. However, rising mortgage rates tend to curb demand. If demand falls, does that mean we’re heading for a crash? Probably not. In fact, demand cooling off might actually be good for our market’s long-term stability.
One of the consequences of our crazy-high demand has been our incredibly low inventory levels. As of now, there are only 17 active listings in all of Harrisonburg. New construction homes can’t meet demand, so I expect to see another hot seller’s market this spring.
So with high demand and low inventory, are we heading for a crash? In my opinion, no. The housing market will be strong for a while, so if you are thinking about buying or selling a home, please call or email me. I am always willing to help!