Is the housing market going to crash?

This is the number one question that I recive when working with both home buyers and home sellers in the Portland & Vancouver metro areas; and its understandable! With news outlets fueling this narrative, as well as folks seeing constant price drops on sites like Redfin, Trulia and Zillow, I can understand the hesitation. I work each and everyday, sometimes ten or more hours per day, deeply involved in the workings of the housing market in my service area. While I also see the same news and same notifications that you see, what I also see if the data behind the metro areas with regard to sale prices, pending days on market and sale fails. In a nutshell, this is what I'm seeing:

• Home prices are not falling -- well not really. I agree (and the data supports) that a lot of homes are undergoing price reductions. I attribute this to two things: Quality of the home and pricing as if we're still in the 2020-2021 market. Homes that are priced appropriately to the most recent comparable sales are still recieving multiple offers within days of being on the market and selling for over asking price.
• Interest rates are starting to normalize. Over the past two years mortgage interest rates have been historically low -- this accounting for the massive number of active buyers all looking at once. In 2019 the average mortgage interest rate for someone with good credit was 4.51%*. In 2021 the average interest rate for someone with good credit dipped down to 2.65%. This week I saw multiple pre-approvals locked in at 5%-5.25%. While still higher than a normal rate, much lower than last quarters 6%+ rate.
• Equity of home owners is at an all time high. The average homeowner holds about $100,000 or more in equity. This is the perfect insulation for a recession. Unlike in 2008, where homeowners had zero or negative equity, homeowners now have a ton of equity on average and this will help to prevent forclosures in the future (which result in massive price downs)

Overall, I think that we're currently experiancing a slow down and will likely continue like this for the next 10 months. Month by month the local markets are seeing more inventory (part of the issue with 2020-2021) and sellers are more keen to invite an offer.

If you have further questions or would like to bring new statistics to my attention, feel free to email me at Taylor@stayrealtygroup.com