4 Indicators that signal a real estate market crash
Channel: Nick McLean Real Estate Group
Date: 2022-09-23

Here are the four signs of an impending housing market apocalypse. These four signs will tell you there's an impending housing market bubble about to burst.

First Indicator
Builders overextend themselves and there's a surplus of new construction on buildable lots in the marketplace. If you look at the 2008 housing market crash, builders had overbuilt and the supply of new homes outpaced the demand. If you start seeing builders overbuilding, overextending, and overdeveloping, that's an impending sign of a housing market crash. 

Second Indicator
You will see too many variable-rate loans and risky subprime loans.
Lenders giving out too many loans to people with low credit scores, and issuing adjustable mortgage rates that fluctuate during the loan payoff is a recipe for disaster. In 2008 we saw a lot of these types of loans that started at a four or five percent introductory rate and then all of sudden when the market crashed, the rates jumped to seven or eight percent. Which put many borrowers in a tough spot, unable to afford their mortgage payments.

Third Indicator
Rising unemployment rate. 
When unemployment numbers are too high then tenants struggle to pay their rent and that leaves the landlords exposed. People that lost their job with mortgages will also find it harder to come up with their monthly mortgage payments. If people can't pay their mortgages, they're going to be forced to sell, which just makes the supply increase. If supply is increased faster than demand, then we're going to see a domino effect and a decline in prices. 

Fourth Indicator
Increase in foreclosures and distressed properties
The ultimate sign of a housing market bubble crash is foreclosures and distressed properties. People can't make their payments and the banks start to take properties back. You might start seeing homes that are neglected and not taken care of, weeds growing, and properties being condemned. If you see an uptick in foreclosures and properties not being maintained that could be a sign that a housing bubble is bursting.

The good news
It is important to be on the lookout for these indicators if you are in the process of making a move or if you want to move in the future. Luckily, right now, in the short term, we are not seeing any of these factors. The expert team at the Nick McLean Real Estate Group is constantly evaluating the conditions in the marketplace and relaying that information to our clients. We have your back!

If you want a quick and easy way to get the current value of your home, go to our website NickMcLeanRealEstate.com or click the link below.
https://www.nickmcleanrealestate.com/home-valuation/

If you want a listing expert to come over and tell you what improvements will increase the value and demand for your home so in the event of a crash you can still sell if you need, call 509-255-8070.



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