Realtors Touting Market Crash

[Preston C.]

I’ve seen a lot of agents lately talking about the market crashing soon, and using that to their advantage to get people to sell their home. Is that really legal for realtors to do? It definitely doesn’t seem ethical to me, as no one really knows for sure when or if the market will crash. Stating facts about what’s happening in the market and with interest rates, politics, etc. I get is ok. But flat out telling people the market is going to crash soon doesn’t seem right.

[Ronald Allen Barney]

I'll add my own opinion here about where the market is headed and give bullet points as to why I have that opinion:  I think there will be a very slight downturn in prices over the next year but not a "crash".  Those on the fence for selling, I don't fearmonger them but I do say that sooner is better than later in general terms based on where the market is going.

What has influenced my opinion on this?

1. Projections from the NAR's market researchers.

2.  Vlog "One Rental At A Time" on Youtube where you get a pretty grounded, realistic analysis of trends by the host.

3.  Ken McElroy whom I sometimes take with a grain of salt, but in this case his projection is aligned with ORAAT.

4.  The Fed seems obsessed with never increasing the prime rate any time soon, and that will continue to fuel demand.

5.  Most of the "inventory catch up" in the market is from new construction, and while that has mitigated the insatiable owner occupier market only somewhat, it has mitigated large institutional buying sprees a little more, which has an effect of easing up on inventory pressure "a little bit".

6.  Crashes generally require something structurally and seriously wrong in the mortgage product market.  That industry has continued to be careful in lending practices so unless an unforeseen economic collapse happens in the next year (worse than the covid recession so far), there's not going to be a huge wave of defaults.

Summed up, I see no evidence of a collapse, but with some boosts of inventory from new construction prices may get to be a little less crazy over the next year.  A little less.