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In the early 2000’s before the housing crash, home prices were skyrocketing to levels that were not sustainable (a housing bubble). In response to this real estate market news, the Fed raised interest rates 17 times from 2004-2006. That killed the real estate market because the Fed didn’t realize how many people were using Adjustable Rate Mortgages with interest only payments. This made homeowner’s mortgage payments a lot cheaper for a teaser period. But once the teaser period was over, their mortgage payments increased greatly. Housing inventory flooded the market and home prices dropped causing many homeowners to be underwater on their mortgages. This caused a flood of foreclosures and the market crash.
Inventory in northern CA was about 8 times less now compared to 2007. Also, to give you a mortgage update, interest rates in 2007 were around 6.5% but are only about 2.7% right now for a 30yr fixed rate mortgage.
Stay tuned for episode 2 of this video series where I’ll give you a housing market update and share what to look out for that would be possible indicators of a housing crash or housing bubble.
Comment below: what’s your housing market 2020 forecast and housing market forecast 2021? Do you think a housing crash 2021 will happen and there will be a housing crash or do you think the real estate market 2020 will continue to surge? I wonder what Meet Kevin thinks?!
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Jason Walter, CPA (lic #103885)
Sacramento Realtor/Sacramento real estate agent and native
Realty ONE Group Complete (DRE #01923240)
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Why Aren’t Home Prices Dropping? Housing Market 2020
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Jason Walter is not a practicing tax accountant or a licensed attorney or financial adviser. Therefore, the information in these videos shall not be relied upon as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified tax accountant, attorney, or financial adviser. We have taken reasonable steps to check that the information in this video is accurate but we cannot represent that it is free from errors. You expressly agree not to rely upon any information contained in this video – it is for entertainment purposes only.
This video description may contain affiliate links that allow you to easily find the items mentioned in my videos as well as support the channel at no cost to you. Thank you for your support! Jason Walter is a licensed Realtor with Realty One Group in California under DRE #01923240.
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