With home prices escalating both buyers and sellers are worried that the housing market is just too good to be true and real estate agents are getting asked the question, “Are we in a housing bubble?

Here are the factors that suggest we are not in a housing bubble:

Housing Supply – Unlike the housing bubble that occurred in the mid 2000’s the major factor currently driving up home values is that there is a huge deficit of homes on the market for sale. A balanced real estate market has around a 6-month supply of inventory however, the current inventory is around 1.9 months which is historically low. In comparison the inventory level from 2005 to 2007 went from a 5-month supply to an 11- month supply creating a vast over-supply of homes that drove prices down.

Housing Demand - The biggest indicator of price appreciation is supply and demand. So, what is taking place in today’s market? Millennials, the largest generation in the US, are finally ready for homeownership, The health crisis has homeowners re-evaluating their current homes to determine whether it meets their needs, which is driving even more buyers into the market. These two big factors, along with historically low mortgage rates, make purchasing a home today a good financial decision. More than 38% of homeowners have paid off their mortgage “free and clear,” and another 18.7% have paid off over 50% of their mortgage. This positive equity perspective puts the current housing market in a much stronger place, minimizing risk of foreclosure and stabilizing home values across the U.S.

At the end of the day, knowledge is the most powerful tool. Robb Realty Group analyzes the data, provides insights and communicates what is going on in the market, which is key to helping you make the best real estate decision. Find out the value of your home with our Instant Home Valuation tool.