Here’s Why the Housing Market Isn’t Going To Crash in Beverly Hills and Los Angeles, CA
Here’s Why the Housing Market Isn’t Going To Crash in Beverly Hills and Los Angeles, CA | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
As the housing market continues to heat up in cities like Beverly Hills and Los Angeles, many people may be concerned about a possible crash. Memories of the 2008 financial crisis are still fresh in the minds of many, and the idea of losing their homes and investments can be unsettling. However, there are several reasons why the housing market today is different from what it was in 2008, making a crash less likely.
Tightened Lending Standards
One of the reasons why the housing market is more stable today is due to tightened lending standards. Before the 2008 crisis, lending standards were loose, and many people were able to obtain mortgages that they could not afford. This led to an increase in foreclosures and a subsequent crash. Today, banks and lenders are more cautious about who they lend to, ensuring that borrowers have the ability to repay their loans.
Decline in Foreclosures
Another factor that contributes to the stability of the current housing market is the decline in foreclosures. Since the 2008 crisis, there have been regulations put in place that protect homeowners from losing their homes. Additionally, the job market has improved, and more people are able to make their mortgage payments. This means that there are fewer foreclosures and less risk of a crash.
Low Home Inventory
Home inventory is also much lower today than it was in 2008. This means that there are fewer homes available for sale, and demand is higher. Low inventory can drive up prices, making it less likely for the market to crash.
Homeowners with Equity
Finally, homeowners today have far more equity than they did in 2008. This means that they have more invested in their homes and are less likely to default on their mortgages. Additionally, many homeowners have refinanced their mortgages at lower rates, reducing their monthly payments and making it easier to make payments.
In conclusion, there are several reasons why the housing market today is less likely to crash than it was in 2008. Tightened lending standards, a decline in foreclosures, low home inventory, and homeowners with equity all contribute to the stability of the market. If you are still concerned about a crash, it’s always best to speak with a local real estate professional who can provide you with more insight and guidance. But for now, homeowners in Beverly Hills and Los Angeles can breathe a little easier knowing that the housing market is in a much better position today than it was in 2008.