Did you know that almost 21.5% of America’s housing value comes from California?
If you’ve paid attention to how the market has been behaving, you may have noticed a few warning signs. Since it’s better to be safe rather than sorry, it’s worth looking at the details and making some informed decisions.
Looking at the Bigger Picture
While the market isn’t as volatile as it was during the bubble burst, rates are rising. It’s important to look at the bigger picture, including the historical context. Compared with the past, the Fed is more conservative and rising rates aren’t necessarily a sign of the end times.
Rather, rates rise and fall according to the fluctuations of the economy. The pandemic put a halt on almost everything. Despite this, there has been more or less steady progress in terms of getting the market back on track.
The fallout from the pandemic and other factors isn’t something that can go away overnight. It’s true that there’s a looming recession that can end up having a domino effect. For instance, there may be an influx of home foreclosures.
How This Affects the Bay Area Housing Market
A recession doesn’t always equal a housing market crash. There is still plenty of stability within the Bay Area housing market. One factor that’s a bit worrying is the steady rise in appreciation since the bubble.
Instead of a huge crash, it’s more likely the prices will continue to go up before there’s any sign of them going down.
Since home construction in the area isn’t as fervent as it was in the past, there is a lower chance of foreclosure across the board. It also helps that mortgage lending standards are much stricter than they once were. There’s no sign that this is going to change anytime soon.
When it comes to mortgage rates and purchasing power among homeowners during this potential recession, there will be a balance. It’s possible for things to tip into the red, of course, but even the worst forecasts won’t approach the problems of the real estate market bubble burst of the past.
Are We Facing a Recession?
Has a friend or family member ever asked you, “Are we facing a recession?” Now that you’ve learned about it, you can explain how it’s affecting the Bay Area housing market.
With half a century of combined experience, our law firm can help you with both real estate and foreclosure law. Feel free to reach out to us at any time and start a conversation about your potential case. We look forward to hearing from you.