Sales down, pendings down, prices up. Sound like 2007? The question often heard is, will we repeat 2007-2009 again? The number of units sold and the number of pendings during the first 6 months of this year are both down compared to the same statistics for last year. And yet prices are up. In 2007, this same pattern led to a major correction in 2008. Will that happen in 2021?
The chart below shows that the first 6 months in 2021 are similar to 2007 when unit sales were down, pendings were down and prices were up. The same pattern is evidenced in the first 6 months of 2021. Although there are similarities to 2007, there are some major differences. In 2007, the inventory of available homes was high, while this year inventory is very low. In addition, the equity in homes today is much higher than 2007 when there were many “no doc” loans which created a risky profile of existing inventory.
Although there are similarities today to what the market was like in 2007, we can witness several trends, such as solid loans and low inventory, that protect us from another downfall.
The chart below presents a deeper dive into the current Ada County real estate market.