Are We in a Housing Bubble? Experts Say No.
Dan May • July 2, 2021
Are We in a Housing Bubble? Experts Say No.
The question of whether the real estate market is a bubble ready to pop seems to be dominating a lot of conversations – and everyone has an opinion. Yet, when it comes down to it, the opinions that carry the most weight are the ones based on experience and expertise.
Here are four expert opinions from professionals and organizations that have devoted their careers to giving great advice to the housing industry.
The Joint Center for Housing Studies in their The State of the Nation’s Housing 2021 report:
“… conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in house prices instead reflects strong demand amid tight supply, helped along by record-low interest rates.”
Nathaniel Karp, Chief U.S. Economist at BBVA:
“The housing market is in line with fundamentals as interest rates are attractive and incomes are high due to fiscal stimulus, making debt servicing relatively affordable and allowing buyers to qualify for larger mortgages. Underwriting standards are still strong, so there is little risk of a bubble developing.”
Bill McBride of Calculated Risk:
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while, because Millennials need houses. Prices will keep rising for a while, because inventory is so low.”
Mark Fleming, Chief Economist at First American:
“Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally… Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”
Bottom Line
All four strongly believe that we’re not in a bubble and won’t see crashing home values as we did in 2008. And they’re not alone – Goldman Sachs, JP Morgan, Morgan Stanley, and Merrill Lynch share the same opinion.
Westside Sellers: Why Early Planning Matters More Than Early Listing For homeowners considering a sale this year, February is less about listing immediately—and more about strategic positioning . Sellers who start planning early often benefit from a clear pricing and marketing road map—learn more about our Seller services on the Westside . On the Westside of Los Angeles, homes that perform best in spring are rarely last-minute decisions. They’re the result of thoughtful planning that begins weeks—or even months—earlier.
What Beverlywood Home Sales Show Over Time Each January, I step back and look at what actually happened in our local real estate market — not forecasts or headlines, but real, closed sales. Over more than a decade of reviewing this data, one pattern has stood out: the number of homes sold each year remains relatively consistent, while prices steadily rise. This January snapshot looks first at Beverlywood as a whole, then drills down into three key sub-markets where I have long-standing experience and market share: Beverlywood HOA, Castle Heights, and Reynier Village. All data referenced in the final version of this report are based on single-family home sales reported in the Combined LA/Westside MLS, using consistent boundaries year over year.
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