Are We in a Housing Bubble? 
April 30, 2021

Many people are wondering if we are in a housing bubble or if we are heading towards one? Housing prices are soaring, there are often bidding wars, and many Americans fear home ownership is out of their reach due to this. We are most definitely in a housing frenzy that is being driven by an extreme lack of inventory. What does this mean? To put it simply, it means that there are not enough homes on the market to meet the demand. When the demand is high but the supply is low, it causes the prices to rise and rise. 

Will this become a housing bubble and then burst? Not necessarily. Real Estate is one of those markets that tends to rise in value much easier than it falls. Which is a good thing. According to National Association of Realtors chief economist Lawrence Yun, this "is not a bubble. It is simply a lack of supply."

According to, the national real estate inventory declined by 52.0% over last year. There are approximately 534,000 fewer homes listed for sale on a typical day in March compared to the previous year. Even though newly listed homes are still declining compared to the previous year they have improved slightly compared to last month. Newly listed homes on the market declined by 20.0% nationally and by 17.9% for large metros over the past year. There just simply aren't enough houses on the market to meet the current demand. In the U.S. the typical home spent 54 days on the market in March this year, that is about 6 days less than the same time last year. In fact, in the South houses are actually selling even quicker than that. We are seeing them spend about 12 days less on the market than in previous years.  Houses are moving FAST! 

Specifically in the metro Atlanta area we are seeing about 29% less inventory than March of last year. Houses in this market are only spending on average 31 days on the market. The average listing price in this metro Atlanta market was around $349,000 in March of this year. However with this being the average that tells you housing prices are definitely at a high. You might wonder, why are prices high and continuing to rise? Housing prices are being driven by a combination of different things. These include mortgage rates continuing to be low, the construction slowdown caused by the pandemic, and of course a desire for more space as so many people are now working solely from home as well as homeschooling their children.

Many people are wondering if the housing market will maintain this momentum. While it isn’t a guarantee either way, there are some signs that it is slowing down at least a little according to reports done last month by the NAR (National Association of Realtors). For the second month in a row sales have decreased some. This is possibly a sign that the hot real estate market may be slowly cooling down but at the same time it could just be because again there are not enough houses to buy currently on the market. But that could also begin to change in the coming months. The one thing that is for certain is that the buyer demand is still strong. There are now more and more adults in the U.S. being vaccinated for Covid and this is helping with job creation. All of this data does seem encouraging that the existing-home and new construction inventory both are expected to grow in the coming months.

According to Keeping Current Matters, home values increased roughly 10% in 2020, and they’re predicted to continue increasing by about five percent this year. The housing market is much different now than it was during the housing market bubble a little over a decade ago. So, most real estate researchers feel the current trends in the market are not cause for concern. It is simply a case of supply and demand. With houses staying on the market for approximately only two months it is just proof that this is most definitely a seller’s market. But the other difference in between now and the housing bubble is that this time the housing demand is genuinely real. Between the millennial generation now coming to the age of marriage and children and the health pandemic over the last year, most people have a new appreciation and meaning of “home”. 

To put it simply, I believe that living through the Covid pandemic has caused many people to put a different level of importance on their home and the true value of homeownership. This will ultimately continue to benefit the real estate market going forward without the negative housing market crash that happened in the past. Based on all the research I have done I have to agree with the real estate professionals in saying that this does not match up to the definition of a housing bubble. Therefore, there is no need to fear the market crashing in the near future. If you are interested in selling your home and getting top dollar now is definitely the time to do so and the market can use all the inventory it can get. With that being said if that is something you are interested in contact me today! I want to be YOUR realtor! I can get your property views from all over GA but with the added conveniences of being a local agent. Real estate is my profession, but people are my business. Let me get started working for you today. 


Alicia Edwards - Realtor

I want to be your realtor! Let me help you find your next home or sell your current one. Call me and let me get started working for you today (678) 622-0302. I look forward to talking to you soon. Your Home, Your Future, My Commitment!

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