Housing bubble market predictions forecast 2021 when will prices go down, drop, or happen to cause a coming real estate crash
Are you worried that this coming year in late 2021 that we will see prices crash and go down a lot? You wonder if it’s coming and how do you really know?
If we look at the Minnesota foreclosure process, we see that there is a backlog of homeowners who didn’t make payments thanks to the federal foreclosure moratorium of 2020 – 2021 that’s been ongoing and preventing inventory to hit the market here in Minnesota as the foreclosure moratorium extension delays it further.
Right now minnesota housing inventory is so low that homes are easily selling for over asking price, but that’s for now. Many builders have quit building due to the uncertainty of the cost of lumber, and a shortage of contractors.
It you are looking for a buyer for your home before any crash comes, stay tuned and I’ll give you a link below to read my full article on the cash price and term offer types, to sell your house fast.
There’s a lot of pressure in the local Minneapolis, Minnesota housing market and buyers have got burnt out from seeing homes and not getting offers accepted.
When is The housing bubble about to burst in the US and what will happen 2020 – 2021
The question really started with doubt in March of 2020 when the covid virus caused a stock market crash and into 2021 where the shut down and unemployment continue into May 2021 with now a crypto crash where today the $2.5 trillion crypto industry lost $1 trillion quickly.T
he whole industry has been down 40% in days or a week or two. The concern is if the housing market is next to have the bubble burst.
If the 10 year interest rate yield goes up and mortgage rates closely follow that could cause housing affordability to change and it would put pressure on home prices since the payment would be more money monthly due to the higher interest rate.
If more defaults and Minnesota foreclosures were allowed to come through by removing the federal foreclosure moratorium then inventory would stack up and cause more competition on housing prices.
In 2006-2007 the builders had too much inventory and we don’t see that this time around, quite the opposite that they can’t keep up with demand, but labor shortages and rising lumber prices will likely cause other major problems on pricing for the Minnesota builders.
If unemployment remains high, inventory builds from foreclosures amd defaults rise lenders can tighten even more than they have.
It’s true that loan requirements are more solid than before the 2007-2008 crash except this time around non banks are far bigger for loan volume and they don’t have the same strict guidelines.
In fact reports have been coming out that show a picture of record loose lending all though the credit of the average borrow can be seen at almost 760 score for 45% of them.
The banks this time around wanted to reduce risk so a lot of the lent money is non banks who likely have looser standards.
This blog answers…what started or caused the housing bubble crisis crash 2007 – 2008 explained and what was the solution
I was around back when the housing market crashed in 2008. In fact I sold my last rental days, or hours before the Lehman crisis. I knew what was coming in April of 2007 due to the tighter lending.
I saw the slow down in 2005 with the builders and I knew they had extra inventory that they couldn’t sell. This did drag on for many years.
In fact January of 2012 is when the phone started ringing and things started to pick up. 2007-2011 the inventory was extremely large.
My opinion is that in 2005-2007 the lenders got extreme right on lending and it caused inventory to rise, price drops and it was just a matter of time before the 30-50% drops caused a crash everywhere in Minnesota.
You can say it was the high inventory that caused the crash, but I would say the right lekding caused the high inventory, but then you could say defaults caused the tight lending, one could also say the the loose and poor lending standards caused the defaults.
The solution for the lending industry is to have much stronger underwriting and lo standards.
This includes higher credit scores, better documentation for employment. Stronger DTI (Debt-to-income-ratios).T
he appraisal process got very tough and the 3rd party appraisers weren’t used for awhile as the lenders now wanted to choose their own.
These tougher standards were a bog help, but now in 2021 there are inspection waivers and appraisal gap coverage due to overbidding on multiple offer situations. The lenders could get in a bad situation again.
A few concerns this time around vs. last time. We don’t have the bad ARM adjustable loans to the degree we did last time. My concern is that the fed is buying most of the mortgage back securities.
My other concern is the DTI ratios, low down payments and that any interest rate spikes would be a high percentage off a lower number this time. The speculation and over paying for homes this time around isn’t good.
If you are concerned that the market will hit a downtown than you should seriously consider selling your Minnesota home fast. I’ll cover the math, options and investor types ready to buy your house.
Once inventory starts to build amd the competition heats up you will find yourself seeing the signs all over on the corners and searching google for “ We buy houses in any condition cash near me “
When you are ready to sell your Minnesota home due to the looming housing crisis that’s coming and you want to sell now before it’s too late…
“I’m ready, I’ve decided it’s time to sell my mn home as-is, fast cash offer!”
