Demand is high and the supply is low, are we heading for a repeat of 2008?

San Diego real estate agent Matt Huneycutt discusses what it takes for us to be in a housing bubble, and though we can’t predict the future of the market he doesn’t not see us heading for a market crash.

Are we in a housing bubble?

Maybe, but depends on how you define bubble. My clients right now are asking me, "Matt, are we revisiting 2008? Are we going back to foreclosures across the market, people getting kicked out of their homes, losing equity overnight, the whole madness and mayhem?" Well, we have to look at both sides of the story.

What is a Housing Bubble?

A housing bubble has two parts. One is defined by a run up in demand from inside or outside forces. Right now we do have a run up in demand. We've got super low interest rates on homes which is bringing more people to the market than usual. At the same time, we have record low inventories. Not that many people are selling homes right now. So when you look at that, yeah, it's naturally going to run up demand.

But the other side of the story is are we running up supply to match the demand? Well, not here in San Diego. We're 35,000 housing units short of demand. This time two years ago, we had 13,000 units on the market. Today we're less than 3000 units. It doesn't sound like we have an oversupply problem on the horizon. So the big question is what's going to happen in a year or two years from now?

Do we expect home prices to drop? Well, the answer is will we continue to build homes to outpace the current demand that we have today? I don't know. In San Diego, we're south of Camp Pendleton, north of Mexico, east of the Pacific Ocean and west of the desert. We don't really have a whole lot of space left to build but we do have the country's third best climate, one of the four biggest centers for the Department of Defense in the whole continental United States. We've got fantastic sources of industry, biotech, aero tech. We've got lots of hospitals and universities.

I just can't see a time that this is not going to be a place that's in high demand. The key point that I really want to give people is it's tough to buy right now, but I need you to stick it out because it's not going to crash. And if you need more assurances than that I've got a great collection of data on the point.

If you want that info, just go ahead and text me housing bubble at 619-993-8144. I'll set an appointment with you and we can go through all of it together.