Another common question we are getting asked is, Is what’s happening now going to be like what happened in the 2008 housing market crash? Hi, I’m Charisse Walker. If you look at annual home price appreciation six years leading up to the 2008 crash from 2000 to 2005 we saw an increase from 6.5% to 12.5% which is significant, but if you look at annual appreciation from six years prior to now from 2014 to 2019 home price appreciation only ranged from 4.4% to 6.4% which is nowhere near the high levels of appreciation prior to the 2008 crash. Really the highest year in the last six years is not even equal to the lowest year leading up to the housing crash. Meaning we haven’t had aggressive levels of appreciation over the past six years, it’s been more normal. Also, if you look at this graph from the Mortgage Bankers Association if you look at the Mortgage Credit Availability Index, meaning how easy it is to get a loan, if you look at the peak on this graph in 2006, the taller the graph the easier it is to get a loan, if you look at the crash at the time of the housing bubble, the graph was high, so it was easy for people to get a loan during the crash, but now if you compare how easy it is to get a loan, on the left side of the graph, but now it is much more difficult to get a loan and qualify. Lastly, back in the crash in 2007 we had 8.2 months of supply of inventory on the market, and we know that having any more inventory above six months puts us in a buyers market, and now currently today we only have 3.1 months of inventory which means we are in a sellers market. Also, right now if we look at this graph showing the Total Home Equity Cashed Out, by Freddie Mac, back during the crash, we had 824 Billion dollars of money refinanced on their homes, now we only have 232 Billion, so we have more equity in our homes now. During the crash, people were buying cars and boats and using their homes as an ATM, they were financing their lifestyles. Today consumers are treating equity very differently today. And now today 53.8% of homes have at least 50% equity today. In 2008 homes were leveraged to the till and people owned more than they were worth so they were walking away, but today when people have so much equity in their homes they are not walking away. Lastly according to Zillow and NAR, in 2008 the Percent of Median Income needed to purchase a home was 25.4% of a households income was needed to pay the mortgage, and today only 14.8% of households income is needed to pay the mortgage, again very different today than 2008. So if we look at all these things to compare 2008 to today, most of the factors that led up to the crash in 2008 just don’t exist today. One thing that is different that in 2008 the unemployment rate was 13.2 percent and today we are at 20.6 percent, so that obviously is having a negative impact on the economy, but slowly as the pandemic isolation and social distancing starts to ease up, the hope is that people will start to get their jobs back. So, I’m not saying what will or will not happen to the housing market, but most of the factors contributing to the 2008 crash are just not present today. Hey, I’m not giving my opinion, I’m just stating what experts are saying and I thought it could be of service to you. Feel free to reach out to me here at Chalker Properties with any questions or concerns, we are always here to help.