Today I wanted to share with you my thoughts on housing market crash.
If you’re new here, my name is Shawn Yu in Portland, Oregon, selling since 2008. Welcome! I’ve been through the 2007-2008 market crash. In 2007, I was a consumer, which means I wasn’t a licensed agent.
And in 2008 I got the license in March. I remember going into the brokerage office, it was a big office and it was completely empty. They were just Raylynn or Craig…very empty office. People were saying, “why are you getting into real estate?” “This is the worst time to get in, because people are losing houses. Nothing is selling so many inventories, so many homes for sale.” It was crazy. And I watched that through.
And now, some people seem to want that housing market to crash again, so that they can snatch up some good deals. I understand why because there’s a lot of frustration about the housing market being so unaffordable. Price is high. It really didn’t come down much at all. And the interest rate is so high. Monthly mortgage is like $4-5000 on a home that you could probably buy at around $3000 a month before.
We need to be careful of what we wish for based on my experience of 2008 market crash, because the market crash like that really hurts regular people like you and me. Bunch of people lost their homes. People really suffered.
On the flip side, if you’re an investor, I can understand why, because that kind of crash will get you one of the best deals.
In 2024, what we what we really need is a market correction, which is happening right now because it’s not going up too high, it’s not going down that much in certain markets. The price is going to go down a little bit. But overall (if you average out), the country is anywhere between 3 to 4% appreciated since 2023. So that is sort of healthy price going up. If you see 20% annual appreciation, that’s not a healthy market. Yes, you may make a lot of money in hyper appreciating market, but I think the healthy market is anywhere between 2% and 5% annual appreciation.
Hopefully with 2%, 3% for the next few years until we can catch up on the home value and hopefully the market can stabilize.
In my opinion, right now could be the good time to buy because of the competition is still low. This is the time. If you’re a first time buyer, find a way to buy and to afford a home by getting a roommate, getting a tenant. Look into multiplexes like duplex, triplex and four-plex. Get the get the smaller home that you can afford rather than having the certain expectation of room size and bedroom count and everything, and stay on the sideline because as I mentioned before (I feel like I’m a broken record), if the interest rate goes down closer to 5.5%, the price is going to go up fast again. It could go up really fast. And one thing to note is that inflation means things are getting more expensive. That’s what we’re going through right now. The housing market is still going up. It’s because a part of the inflation effect, the money has lesser value. So, if you’re a first time buyer find a way to get into a homeownership.
I rather see many young people buy first home rather than keep renting. And I’ve seen some of my friends who were young moved into Portland in 2010-11. They didn’t buy (I should have pushed them to buy), but they ended up renting and when they left town for their jobs, they basically lost $100,000- 150,000 on the rent. If they bought something, they could have left with like $50k to $70k cash in their bank account rather than loss.
Thank you so much for reading and have a great day!
Shawn Realty 