Are We In Another Real Estate Bubble In The US?

Owning a home is one of the most sought-after dreams that anyone can have. While the world is still reeling with a pandemic that seems to grow stronger by the year and the resulting economic recession, they take heart from the favorable real estate market that allows them to buy homes at record low mortgage rates.

While it may seem that a rapid increase in demand may lead to a real estate bubble, the opposite seems to be the case. A Warrenville real estate attorney from Covert Marrero Covert can guide you to the best decision.

Why the US Housing Market Can Avoid Another Real Estate Bubble

As more and more people opt to work from home in 2021, the value of residential properties across the US is increasing. As the world grows hopeful for a return to normalcy during successful vaccination campaigns, economic growth has been positive across the board. There has been a positive increase in high investments in the stock market along with higher consumer expenditures.

Both of these factors have impacted the US housing market amidst a housing boom that outperformed expectations. As of March of this year, the median home prices in the country increased by more than 11%.

The steady growth of the housing market has led many to wonder if we are in the middle of a new real estate bubble. As per market updates, as consumer demands coincide with the real estate season, a reduced number of homes have increased prices.

The news is heartening. While median home prices in the US are expected to be higher than those in 2020, the median mortgage rate is forecasted to remain around 3% at most. This alone should be enough incentive for homebuyers to lock in properties before the rates go up any further.

The expectation of a housing market crash is understandable, but so far, the data has proven that there is nothing to worry about at present. Like other economic sectors, the real estate market is susceptible to several factors. The patchy impact of the Covid-19 pandemic on the employment sector and the country’s overall income level will likely affect the 2021 housing market.

As such, there has been a slow but steady decline in home sales in 2021 on a monthly and yearly basis. This proves that the housing market is cooling down slowly after the buying frenzy of 2020 and 2021. The good news is that the decline is slow enough to prevent a large housing bubble from making a difference.

Contact an Experienced Warrenville Real Estate Attorney for Lucrative Investments

If you are interested in buying a home or investing in real estate, you need to have a dedicated Warrenville real estate attorney in your corner. This is where the real estate lawyers at Covert Marrero Covert can help. We are experienced in guiding clients such as yourself through complex real estate transactions that can result in great investments. Our professional attorneys are skillful in helping our clients with a range of real estate transactions to improve their portfolios. Get in touch with us for a consultation today and see how we can help you.

How To Protect Yourself From A Real Estate Market Crash

The stock market is not the only thing that can suffer from a bubble home prices can be affected by a real estate crash. During the notorious housing bubble of 2008, home prices plummeted to an all-time low and a large number of borrowers had to default on payments and foreclosures were at an all-time high. It lead to the greatest credit crisis and recession since the Great Depression.

While the crisis was the result of a series of factors, an Illinois real estate attorney will recommend that you protect yourself from the next crash by following these tips:

Determine When You Can Buy Or Rent A House

Houses are usually bought for long-term ownership. Most people stay in their homes for at least 10 years after they buy them, but the option to rent is available to them as well. So if you think that another real estate crash is imminent, rent especially if you don’t plan on living in the house for more than five years. The money you use to purchase can be recovered during this time but it may be too late to do so for you.

Protect Your Equity

While your home is a valuable asset, avoid borrowing against its equity unless it is completely necessary to do so. While emergencies can warrant a loan, avoid tapping into that solution unless you have no other source of funding. Interest rates can rise with some loans and equity can rise or fall. Paying minimum will become unmanageable down the line and if the market crashes, you may have to foreclose.

Conduct A Rating Analysis Of Your Savings Bank

Once you start earning, start saving some of your money as savings right away. Save the amount in a special account in a bank, a credit union, or a savings account. These establishments can host your account and offer growth in the balance at a specific rate.

Most banks and financial institutions invest extensively in real estate. So if the market crashes, they go down as well. In other words, if you want to save yourself from this crisis, evaluate your account holder with professional analysis ratings. These can let you know if the establishment that is hosting your account can survive a market crash or not.

Why You Should Hire An Illinois Real Estate Attorney

Selling or buying a home is one of the most significant life decisions you can make. Chances are that you will spend all of your life savings on it. As such, knowing and safeguarding your rights as a buyer or seller should be one of your main concerns. This is where an Illinois real estate attorney from Cover Marrero Covert, LLP can prove valuable.

We have experienced real estate attorneys who can guide you in the often complex real estate process. We are determined when it comes to managing real estate transactions and ensuring our clients make the best decisions possible. This includes the large number of tasks that go into a house sale. Get in touch with us for a free consultation in any of our Warrenville, Naperville, or Schaumburg offices today at (630) 717-2783.