I am asked every week by friends, family, team members and clients if I think “now is still a good time to buy” and “do I think we are in a housing bubble.”
Even though I blog about this often, everyone still wants reassurance.
And some of the strongest reassurance I have yet to see surfaced again in The National Real Estate Post with our old friend, Barry Habib (market-watcher, prognosticator, advice-seller).
Mr. Habib has been surprisingly accurate with his predictions over the last several years, so we tend to take his information seriously.
Here are a few takeaways:
Why We’re Not In A Bubble
The #1 reason we are not in a bubble is …. record low inventory!
Bubbles require massive levels of excess inventory – like we saw in 2006 and 2007, just prior to the meltdown, when there were 3.8 million properties on the market.
Today, inventory levels are at all-time record lows – with only 1.8 million properties for sale in Q4 of 2019.
Life Events Drive Home Ownership
Mr. Habib also trotted out his now familiar “life event” data, again pointing out how demographic trends indicate that demand is all but guaranteed to increase.
Marriage
One life-event that makes homebuying far more likely is marriage. Millennials now get married at age 30 on average. And, the largest chunk of millennials from the early 1990s baby boomlet is just now hitting 30.
Kids
The life-event that makes a couple most likely to buy is having a child.
For married couples with no kids, homeownership rates hover around 38%.
For married couples with a child, homeownership levels jump to 80% and to 82% if there are two kids.
This is significant because all those marriages likely to soon take place will very likely result with kids – increasing the demand for properties that much more.
Google Search Data
Habib also explains how Google search data is an excellent indicator of future housing trends.
His example is searches for baby registries, which are up markedly – indicating that there a lot of expecting couples/future homebuyers.
His other example is the much more obvious search for “Homes for Sale.” These searches are currently at all-time record highs as well.
Realtors: What To Do?
- Share this info with any client who might have cold feet.
- TAKE ADVANTAGE OF PREDICTIVE ANALYTICS!
We have an excellent partnership with a firm called Revaluate that focuses heavily on life events.
But no matter what firm an agent uses, they should be employing some form of predictive analytics for their farms and databases.
