by Calculated Risk on 5/30/2021 11:12:00 AM
I’m quoted several times in this article from Derek Thompson at the Atlantic: Why You Should Wait Out the Wild Housing Market
“In my time studying housing markets, I’ve seen bubbles and I’ve seen busts,” says Bill McBride, an economics writer who famously predicted the 2007 housing crash. “But I’ve never seen anything quite like this. It’s a perfect storm.”
“It’s not clear at all to me that things are going to slow down significantly in the near future,” he said. “In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while, because Millennials need houses. Prices will keep rising for a while, because inventory is so low.”
In the article, I suggested waiting … but I’d like to add, if you do buy now, be careful about location (like near a busy street) because that can’t be fixed. Also bad layouts are difficult and expensive to fix.
Defective homes will make you unhappy, and they are also hard to sell in a normal market (you might have to wait for the next boom).
Hot markets are when the defective homes (bad location, bad layout, etc.) are sold. Don’t buy one of those!