Consumers Grow Fearful of a Housing Crash

Concern about the fierce housing market and a potential bubble appears to be rising amongst consumers. Google searches for, “When is the housing market going to crash?” jumped 2,450% in just the past month, reports CNBC. “Why is the market so hot?” searches doubled in one week and, “How much over asking price should I offer on a home 2021” leapt 350% at the same time. A severe shortage of homes, pent-up demand, and record low mortgage rates shot home prices up 10.4% year-over-year in February, but 42% of homes still sell above list price. CoreLogic’s chief economist notes these Google trends are potentially worrisome.

That Google question about overpaying doesn’t sit well with Nothaft.

“I have to admit I’m worried when I hear that. It does make me concerned,” he said. “That’s the mindset that comes in, because that means it’s an auction market.”

At the start of this month, 42% of homes were selling for more than their list price, according to real estate brokerage Redfin. This was 16 percentage points higher than the same period a year earlier.

“The housing market is more competitive than we’ve ever seen it, but a couple indicators are causing us to ask whether we’re nearing a peak in terms of how fast demand and prices can grow,” said Daryl Fairweather, Redfin’s chief economist. “Sellers’ asking prices may be starting to flatten in what so far appears to follow a typical seasonal pattern.”

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