With home prices continuing to rise and interest rates so low, some are asking: Are we just inflating another housing bubble? And with low inventory being a major theme for housing, is a surplus of shadow inventory about to flood the market and bring home prices to a grinding halt — or cause them to come crashing down?
With so much interest in where the housing market is going, there’s also lots of speculation — and misinformation. So to debunk some of the biggest housing myths (as he sees them), we talked to Brendon DeSimone, real estate expert, blogger for Zillow.com and author of the upcoming "Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling."
Check out the video to see more on how DeSimone debunks these myths:
1. The housing recovery isn’t real – we’re just inflating another bubble. DeSimone argues the renewed interest in housing is not another bubble. He sees enough demand in the pipeline to sustain the recovery based on the fundamentals of jobs and consumer confidence. Home prices are still down, far below their post-crisis heights, and DeSimone reasons that home ownership is still a cornerstone of the American Dream.
2. When more inventory finally comes online, it will crash the market. DeSimone says that with more supply also comes more demand, because much of the inventory coming on market will be from homeowners selling their home to buy another home.
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3. When you see the home you love, you better jump on it. Despite everything you may hear about competition and needing to act fast because rates are rising, DeSimone says rushing to buy a home will just give you buyer's remorse. He explains that it really takes time to understand the market where you’re looking to buy. It’s better to miss out on your potential dream house than rush in and end up with the wrong house.
4. The housing market is like the stock market. Despite the return of home flippers, DeSimone argues that you can’t speculate on home prices or expect short-term returns like some may do with stocks. He says home flippers are professional investors who do this for a living. For everyone else, buying a home is like a long-term savings account. You have to be patient and be ready to commit for for the long haul.