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Bubble or No Bubble? – News Channel 21

 I talk to people every week that believe we are going to “pop” soon, that we are in a bubble. Now they are entitled to their opinion, as am I, but when I ask why, the answer is always something along the lines of the market is just moving so fast or doesn’t it feel like a bubble? No like I said, people are allowed to think and feel what they will, but those don’t sound like the most thought-out reasons. I usually end the conversations with if I thought there was any chance of a “pop” soon, my home would be on the market, and it’s not…

Possibly the largest factor to point to is credit. Banks are being much smarter these days – the amount of loans being issues is way down, the amount of people obtaining loans with credit scores over 750 is significantly higher than it was 10-15 years ago, and the number of loans made to people with “low” credit scores is far less. Not to mention all the cash buyers. What this means is more “stable” folks are purchasing homes.

Then there are several national indicators that show we, are doing pretty well. Low unemployment, almost ideal inflation, we are in a strong possession in regards to GDP, and both income & consumption are at a fair national level.

Now to be clear, no one can see much beyond the next twelve months with any degree of clarity, but things are positive and the fact that things are moving quickly and things feel a certain way, are not signs that we are in a bubble.

People have concerns over inventory and think that must be a sign that something bad is going to happen. Low inventory is a very common problem among areas like ours, that were small and not well known, but then gets “discovered” and everyone wants to move here. Again, not a sign of anything negative, just a sign that developing and building is not happening at the same rate as increasing demand.

So am I saying that the real estate market in CO will never revert, no. It’s most likely only a matter of time before some type of regression happens. But, do I see it happening soon, no, and do I see it happening like 2008, no, not at all.

The market is hot, but it’s not teetering on the edge of collapse in anyway, like it was years ago. In all honesty, the worst thing I see happening is the appreciation of the median home price in Bend. It may rise far higher than any of us expect, just like many other destination mountain towns in our country.

For a free equity check or suggestions on buying or selling give us a call!


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