written by Jeremy Taylor:
The question of whether the current housing market is a bubble ready to pop has been on everyone’s mind since the radical price increases gained traction across the country. Everyone is going to have their own opinion, but when it comes down to it, its important to follow the lead of the biggest players in the space, those who study these trends day in and day out. Below, you will find four expert analysis discussing what they believe we should all expect moving forward through 2021, into 2022 and beyond.
The Joint Center for Housing Studies in their The State of the Nation’s Housing 2021 report:
“… conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in house prices instead reflects strong demand amid tight supply, helped along by record-low interest rates.”
Nathaniel Karp, Chief U.S. Economist at BBVA:
“The housing market is in line with fundamentals as interest rates are attractive and incomes are high due to fiscal stimulus, making debt servicing relatively affordable and allowing buyers to qualify for larger mortgages. Underwriting standards are still strong, so there is little risk of a bubble developing.”
Bill McBride of Calculated Risk:
“It’s not clear at all to me that things are going to slow down significantly in the near future. 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.”
Mark Fleming, Chief Economist at First American:
“Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally…
Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”
So why is this important to MHP Investing and how could it affect you as the investor?
It’s simple. The housing markets rapid ascension creates an even bigger need for affordable housing, so that is where we step in. Mobile home parks are a one stop shop for people that have been out priced by housing market conditions but still want to experience the excitement and benefits of home ownership. There is and will continue to be an overwhelming need for affordable housing as we continue in this inflationary period, essentially providing evermore “job security” in the field of MHP ownership. There has simply never been a better time to own property in the affordable housing sector- demand is at an all time high!