Since the housing market is making such a nice recovery many people are beginning to wonder if a new bubble is forming and are worried that homes are going to be overvalued, just like in 2006-2007.
Experts have pointed out that even though there has been a large increase in home prices, nationally they are still undervalued by 7% and in 91% of the major metropolitan markets. Even though there are markets that are currently overvalued, the highest ones (such as Orange County and Austin) are by only 9% and 5%, which is NOWHERE near the 06′-07′ levels of 71% and 12%, respectively.
There are also a few reasons that there will not be another bubble, simply based on the supply and demand of inventory:
- Supply is on the rise
- Demand will begin decresing in some demographics
- As mortgage interest rates rise, buyers won’t be able to afford as much
Click here to read the full article and learn more about why another bubble is not on the horizon. >>