Recall with us, if you will, the year 2005. Everyone bought houses. House prices exploded and loans flowed freely as lots of people made lots of money.

Until they didn’t.

But then, the proverbial record scratched in 2009 and it all came crashing down. The bubble had burst, as had every single bank account dependant on that real estate boom.

By 2010, those ‘lots of people’ who made ‘lots of money’ lost a considerable amount of it as foreclosures dominated the market.

The real estate market felt like a ghost town, tumbleweeds and all, as everyone licked their wounds and tried to make sense of it all.

Fast forward to 2018, when the market once again felt like a lucrative wild west – and almost eerily and ominously familiar. Demand outpaced supply, and prices soared.

Was it a sign of things to come?

The Reality Of Real Estate Investments

Real estate investments have long been associated with wealth creation – and growth – in the United States.

In a recession, however, the value of real estate enters a gray area. For residential homeowners, the risks of a recession can prove far greater as the value of their home almost always rests squarely on the shoulders of appreciation, for which there is no guarantee.

So this begs the question: Are we in a bubble?

First, let’s be clear on what a bubble is: an unrealistic, unsustainable value that can’t reasonably be expected to continue. For perspective, home values in 2005 weren’t based on affordability; they were built on predatory loans that allowed people to borrow far beyond what they could afford. When those loans ballooned, nobody could pay them, and the market flooded with foreclosures.

But today’s market is much different. Rates are generally fixed over 30 years and are based on the buyer’s income. So while prices may be higher, they’ve increased in proportion to wages so the odds of loan defaults hitting the market all at once isn’t likely.

The bubble bottom line is this: As long as people can afford their payments – barring a recession or problems in the job market – the real estate market should be sustainable.

At DeLeon Sheffield, we’ve seen – and survived – it all and are here to help you do the same. So whether the time is right for you to buy or sell, or you think it’s best to stay put, we’re here for you, every step of the way, to ensure that your home is – and continues to be – your best investment yet.

Because at DeLeon Sheffield Company, ‘We’re More Than Realty; We’re Family.’