Patrick Iturra Report, April 18, 2022
An imbalance in supply and demand in supply and demand is the major cause of price hikes. Why are property prices rising sky-high? And what happens if the housing bubble bursts?
If you’re looking for the answer, continue reading!
A housing bubble is a term used in real estate to point out the periodic rise in property prices. The housing bubble occurs due to an imbalance in the supply and demand of properties.
How does the housing bubble affect buyers and sellers?
The housing bubble has significantly impacted buyers’ and sellers’ decisions. As the prices go higher, it more likely becomes a seller’s market. Sellers enjoy the high value they get for their houses; this new price of their houses is known as the” Bubble price.” \
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When a housing bubble bursts, prices are likely to go down. People who have bought houses during a housing bubble fear the price fall.
What happens when a housing bubble bursts?
When the housing bubble pops, property prices are expected to crash. The value you have paid for a house isn’t as much now. When people buy properties, they don’t expect much risk in this investment, unlike investing in stocks.
Property investment is supposed to be a safe investment, but after the housing bubble pops, the prices will go down.
How do you deal with a housing bubble burst?
Real estate investment is very vast and dynamic. But there are things you need to be mindful about. Like a housing bubble burst or a market crash. So how do you deal with a market bubble burst? Here are some tips to stay safe during a bubble burst!
- Always estimate your buying power and then go ahead with house buying. Say during a housing bubble, and you are willing to buy a house because it seems right to you; Be vigilant about the unforeseen circumstances that can affect your financial stability, as a housing bubble.
- Know the right time to rent and buy a house. Renting a house can be a good idea when the prices fluctuate. To play safe, you can go ahead with temporarily renting out the property instead of buying it at an outrageous price.
- As an investor, you need to be 100% sure of your decisions. Use professional help to assess your savings. Sometimes a professional real estate agent can warn you about future risks that you may not be otherwise able to see. Real estate professionals know about the market crash and housing bubbles before they occur. Their speculations are pretty accurate.
Are we going towards a house market crash when the bubble bursts?
While a market bubble may seem beneficial to sellers, it is also a significant risk for investors, knowing it could turn into a market crash when the bubble bursts. So are we going towards a market crash when the bubble bursts?
No. We’re not yet towards the market crash, and no one’s losing their houses in the near future. The market crash has various other variables attached to it, Which is the current scenario seems to be out of the picture.
2022 has been a good year for real estate, and predictions are that it will continue booming in full swing. Price appreciations are consistent. Though they may slow down, the market will stay intact, and there’s a close to zero chance for you to lose your house.
I am here to help you!
Over the past 24 years, I have been working as a Mortgage Broker and Strategic Investment Advisor; During this time, I have helped multiple clients buy the right real estate generating long-term wealth & passive income!
Here’s my predictive analysis as follows:
There’s a difference between a housing bubble and an unhealthy price growth. Investors need to distinguish mindfully between the two.
A housing bubble is short-termed, so both buyers and sellers can benefit from it if the decisions are taken strategically.
The housing bubble burst sounds intimidating, but with proper risk management, Seeking professional help from real estate agents, you can save yourself from probable losses.
Housing prices have increased ridiculously high in the past year, and this year is expected to do better.
Do not hesitate to reach out to me with all your real estate investment inquiries, and I am here to help!
Patrick Iturra, Asset Manager at Estate Investments Group
Business development is the ideas, initiatives, and activities that help improve a business. My experience results in your business’s increased revenue, expansion, and profitability by building strategic partnerships and making strategic business decisions.