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Nick Pham, Broker

Nick Pham, Broker

Top San Jose Realtor

Is the Real Estate Market Correction Coming?

It is without doubts that there are a lot of talks about the market "crash", the market "correction" are coming due the growth we have seen this past few years, even during this COVID pandemic! Most believe that there is a cycle to every investment markets, including real estate, and what goes up, must come down. What do you believe? Here are a few graphs to help with your predictions.... Hope your crystal ball is better than mine!

From my point of view, we do NOT have the same market as we did in 2006-2009, where buyers even have to compete with more aggressively. During those years, there were a lot of buyers that could buy homes with "ZERO" down with lenders offering the 80/20 loan programs. Or the "Option-ARM" where buyers can pay minimum mortgage payments at far below current interest rates, and roll the additional interest into their principal. When a buyer can qualify for the minimum payment, with no money down - it beats renting... When the "Optional" mortgage payments were no longer, and everyone had to face payment reality @ 6.000-7.000% interest, those buyers could not afford the payments, and when you invest nothing, you lost nothing!!! So the foreclosures, the bankruptcies "wave" was the inevitable.

Forwarding to 2021, when "fixed" interest rates are at rock-bottom and that most are required to invest 10-20% of their own funds into a home, it would be difficult for homeowner to give up their own equities. Don't forget, the job market also went from the "dot COM" to the "dot BOM" during 2006-2010 period. If Google is investing billions of dollars into the area, and Apple, and Facebook and... What's the chance of the market "crashing"? How about a "Correction", what does it really mean? Love to hear your thoughts…

Nick Pham
Your referrals are greatly appreciated
Real Estate & Mortgage Broker Since 2001
CA DRE: 01365281 | NMLS ID: 242768
PN Real Estate Group | CA DRE: 01885945
PN Mortgage Group | NMLS ID: 364372
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