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Why We’re Still Not in a Housing Bubble

Here are three reasons why our housing market is not a bubble.

I feel like I made a video about this last year, but I keep getting the question, “Are we in a housing bubble?” Let’s talk about it.

Last year, we helped a client in the Army Reserves buy their dream house. Three months later, they were stationed somewhere else and had to sell their house. That should have been financially devastating, but we were able to get them well over what they paid. 

That story might make our market seem like a bubble, but when we step back and look at the numbers, there is no sign of a bubble. Here are three reasons why:

1. We are still in a housing deficit. Homebuilders haven’t been building enough homes for 10 years, so now, we don’t have enough homes for the people who want to buy them. The next generation is paying off their student loans and trying to become homeowners, but there’s no inventory for them.

“This market can’t keep up forever, but it is still a great time to make a move.”

2. Interest rates are low. There’s been some talk of interest rates rising, but we don’t know if and when that would happen for sure. Even if they do go up, they would still be well below our national average of 7%.
3. Nashville’s market has an influx of businesses. We keep getting news of big companies bringing tens or hundreds of thousands of workers into the area. Our economy is strong, which means demand will stay high. 

For those three reasons, I don’t think we’re in a housing bubble. The reality is if you bought a house last year, you would’ve made a 20% return on your money. This can’t keep up forever, but it is still a great time to make a move. If you have any questions, please call or email me. I would love to hear from you.

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