Covid 19 and the CT Real Estate market
With growing uncertainty in the world today is Connecticut headed for a housing crash?
Here are five simple graphs to prove. This time is not like the last time back before the housing bubble burst. Everybody that had a signature had a mortgage. Nowadays, the mortgage companies are much more selective in who they give their pre-qual letters to and that's a good thing. It makes it harder to get a mortgage, but the people that are getting mortgages are actually qualified. The six years leading up to the housing crash, we saw double-digit appreciation on homes. This wasn't a good thing. It was setting us up for a crash. Over the last six years, we've had 5% on average increase. It's been very steady. That's also a good thing. Last time there was an oversupply of inventory. We had 8.2 months worth of homes on the market. Right now, there's 3.1 months' worth of inventory. The lower inventory means less chance of a crash. The last housing bubble burst and scared a lot of people back then. People on average spent 25.4% of their income on their homes. Right now, people are being a little more frugal. They're only spending 14.8% of their income on their house today, much less of a family's monthly income is going towards their mortgage payment.
Leading up to the housing crash. People were using their houses like ATM machines. They were pulling out equity. Any chance they got to the tune of $824 billion worth of equity pulled out from 2005 to 2007 in comparison from 2017 to 2019 us has only pulled out 232 billion worth of equity, just a fraction of what they did the last time. While I agree, it's a scary time. I don't think Connecticut's headed for a housing crash. The economy was doing way too well before this happened. We'll get right back to it. In the meantime, listen to what they're telling you to do. Stay home. Enjoy your family, wash your hands. Practice social distancing, and for the love of God. If you don't need three packs of toilet paper, leave some for your neighbors. Hope to hear from you soon. Let me know if you have any questions.
I'm Dave Jones with Dave Jones Realty. This is CT life. If you're interested in life here in CT, then click subscribe up above. We're here to provide information on all the people, places, and things that make Connecticut awesome.