Market Crash or Correction?: 3 Reasons I Think Everyone Might Be Crying Wolf

Tristan Ahumada

CEO of LabCoat Agents

Hey, Tristan here. Market Crash or Correction? The question on everyone’s mind in the real estate world... 

Two very different words… with two very different claims as we enter the 4th quarter push. 

One side says the market’s going to crash no matter what we do. The other, it’s a housing downturn or correction-after the “bubbly market” (AKA the crazy home values), we saw in the pandemic. 

But beware of crystal balls, right? Because no one really knows what’s going to happen in the next few months…yes, people, investment banks, the so-called gurus out there, are making predictions…

But that’s all they are.

So instead of freaking out about what people are saying… probably to scare you, (so you’ll buy something from them), you need to pay attention to 3 things in your local markets.

(And one critical factor no one is really talking about…).

3 things that all point to a housing market correction, not a crash

(And some very smart people over at Fortune magazine agree with me. (Check out their article, We're Entering the Next Stage of the Housing Downturn).

So let’s get into it…

  • Reason #1- The Home Price Correction is Spreading. Fortune lists 98 regional housing markets showing significant drops in home prices. (and my home state California is being hit big time…).
  • ​Reason #2- The Housing Downturn Will Spread Beyond Housing… and soon. Because when sellers pull back, (which they are), builders also pull back. “Trickle- effecting” fewer lumber orders, appliances, windows, paint… etc. 
  • ​#3- Sellers Are Calling a “Timeout.” Not only because buyers out there are tired of paying top dollar, but seller’s are going to hang on to those record low mortgage rates- vs. taking on 6% or higher, (I sure am...).

Meaning, fewer houses on the market…(way fewer…).

 And the thing nobody’s talking about…

I mean we’re talking a massive drop in inventory. If we look at Realtor.com’s active listings in June, even July- 128,000. But August and September?- It’s down to 31,000!

My math isn’t great- but that’s a huge drop!

Basically, there are no friggin’ houses to sell…

AND why, for now, (because I’m not pulling out my crystal ball…),

I believe a crash just isn’t going to happen. 

My advice? Sit back with me. Pay attention to your local markets- and see what’s going to happen over the next few months… and into 2023. 

And let’s see where this thing is going…

~Tristan

P.S.In case you didn’t hit play at the start…click below for my full breakdown on YouTube.

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