Housing Bubble?

Not so fast. Four reasons why Seattle is not in a bubble.

Reason 1

 
 Many in Seattle are nervous that the housing market we’re experiencing is a sign of another bubble about to burst. However, as Windermere’s Chief Economist Matthew Gardner has pointed out, there is little evidence that this is the case. Below are four points you may want to consider when determining if the home values we see are built out of brick or built out of straw.

Many in Seattle are nervous that the housing market we’re experiencing is a sign of another bubble about to burst. However, as Windermere’s Chief Economist Matthew Gardner has pointed out, there is little evidence that this is the case. Below are four points you may want to consider when determining if the home values we see are built out of brick or built out of straw.

 

Balance Sheets Remain Healthy

Americans are saving their money again and putting more money down on their homes when compared to pre-2008 levels. The average downpayment for home buyers now sits at 8%, much higher than the risky very small or zero downpayment mortgages that contributed to the bubble we saw a decade ago. The estimated total value of all real estate in the US is $25 Trillion, $15 trillion of which is equity. Equity has risen steadily while debt has remained level. Historical comparisons show our collective housing balance sheet remains manageable and healthy. All this means is that Americans have a more sturdy cushion underneath them. 

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