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Do feel that realtors either can't or won't see bubbles that can't be sustaned?
They are human and many humans will convince themselves
that nothing bad is coming in all sorts of scenarios.
Or won't talk about them? Because, well, it would hurt sales.
I think most agents, like the general public, isn't aware of a bubble until it pops. That, IMO, was certainly the case in 2006-2008. If they were aware, I think most agents would advise clients with the knowledge the possessed.
At least where I live, the question isn't a bubble or not, but micro-neighborhoods that will continue to do well. The maxim of location holds ever truer in today's market.
As others have stated, realtors don't have crystal balls, so they can't really tell you if the local market is in a bubble or if it is going to crash. There are some experts who say that the housing is bubbling in some markets in the US, including the man who predicted the last housing crash. Even this though is merely prediction. It's like weather forecasting and stock speculation, you can guess, but can't know for sure until it happens.
That being said, if they did know your market is in a bubble, or believed it was in a bubble, would they tell the buyer? I think it depends on the honesty of the realtor, but I would assume that most would not tell a buyer. That could discourage a potential sale.
Realtors, real estate investors, and others who work in the real estate business profit from the sale of homes, and they profit more from the sale of homes at higher prices. So don't expect them to tell you house prices are likely to come down.
"how long do you expect to be in this house?"
"how much of your approved amount are you actually spending/borrowing?"
sure, those are questions that I ask my buying clients. and no matter the market, if they've indicate a strong possibility of moving in 2 years, my advice has been to continue renting.
Would that be the same in a place like CA or DC where 2 years can mean 30-40% appreciation? Probably not exactly the same.
Note I haven't asked them "how much do you expect to appreciate per year?"
Some good responses here. Yes, it's all speculation there's a bubble until it pops. Historically prices have reset themselves every 20-25 years.
Some agents may correctly speculate when it's about to pop or if there is a bubble, some won't. Of those that correctly judge there is a bubble, some may share with clients and some may not. So I guess the best answer for your question is..."Sometimes?".
I've learned to project appreciation/depreciation in my very specific market as long as no external factors influence the market unexpectedly but I won't be able to predict when the bubble pops. In fact I likely won't realize it's happened until about 6 months after the fact, best case.
knock on wood, I haven't had the client yet who looked for 3 years, started wondering if there was a bubble, backed off, and then restarted the whole charade 5 years later.
As interest rates rise with inflation and wages continue to stagnate we will have downward pressure on house prices. You cannot maintain current prices unless we start to see significant job growth and more importantly real wages increase. Hard to imagine wage increase without tax increases in the current environment.
A better question would be: Where are we in the normal real estate cycle? The last 3 cycles, that have been completed since the mid 70s to prices bottoming at around 2012, average at about 12 years each from the bottoming of prices from one cycle to the next. I'm getting this from looking at the case schiller national inflation adjusted chart.
So the most recent 3 cycles were 12 years. Prices bottomed 2012. Now we have about 5 years of price increases. If history is an indicator of what will happen, then we are a year away from the price peak.
I realize that there isn't an exact way to predict the peak of the market. But most of the normal amount of years for price increases have passed in the current cycle.
If a RE agent could honestly and accurately predict a 'bubble' he could toss away his RE license and make 10,0000% more as a financial analyst / investor. As he would be the most sought after man ( or woman ) on the planet
Your scenario is akin to a dog chasing its own tail OP.
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