10 Years of Housing Crash Stories Explained


After watching Chris Magnotta’s video about this very subject we thought it would be interesting to include it in this week’s newsletter. The housing market “crash” has been talked about every year since 2007/2008 when it really took a nosedive (also the year we started our fist real estate company). Ever since then it has been predicted to crash because of some indicator or another every year. Most of us believe that a recession is coming our way in 2023, how wide or deep that takes our country remains to be seen. A recession influences the housing market differently and may wind up driving rates back down and bringing more buyer’s back to the market. While housing inventory is currently on the rise, we are still at about 1.3 months of inventory (up from a very scary 10 days of inventory at one point) to supply the Denver Metro Area. Our inventory issue is not only caused by a decade of under building in our community but many other influences as well. A recent phenom is something called Rate Lock. Rate Lock happens when many home loans exist with a very low interest rate. 75% of homes in the Denver Metro Area have a 30-year fixed product locked in below 4%. This causes people to stay put longer than they normally would have. We could go on and on about inventory pressures and supply and demand but instead just know that Real Estate over time is still a safe bet. Enjoy our timeline below!

2012– Shadow Inventory – the housing crisis had left a lot of homes in foreclosure and the talking heads said repeatedly that this would cause another housing crash because we had so much of it. That did not happen

2013– Rising Rates – Rates were on the rise in 2013 and had gone up quite a bit and this was going to bring on another housing crash. That did not happen.

2014– Mortgage Applications were Down- This is happening now, by the way, but in 2014 they were down to almost historic lows. The heads said the housing crash is coming. That did not happen.

2015– The Silver Tsunami – Baby Boomers were predicted to sell all their homes at prices that could not be afforded by the next generation and that would cause our next housing crash. That did not happen.

2016 – The Manufacturing Recession – Yes that did happen, and the stock market sold off quite a bit as well that year. This was indeed going to get our housing market. That did not happen.

2017– Home Prices Peaked – (we thought they peaked) Home prices were finally back to where they left off in 2007 and we had reached our Peak. Affordability was coming for us. That did not happen

2018 – Mortgage Rates go over 5% – This was going to cause people to not buy a single house and bring on another housing crash. Not only would people purchasing their own homes bail on the housing market but so would investors. That did not happen.

2019– Housing Inventory Rising- We must admit that we even thought that inventory would go way higher that year, it was on its way in the Fall and then came to a screeching halt. Some markets began to see a slight decline in appreciation as well in 2019 and the heads said, “We Are Here”, the crash is upon us. That did not happen, and we are guessing if you purchased a home or investment property in 2019 you’re doing ok.

2020– Covid – I don’t think I need to expand on this one. This “market crash” did not happen.

2021– Forbearance Crisis – I know you all remember this it was a headline in every paper, on every blog title and every video title about housing. This was going to deliver the long-awaited housing crash. Appreciation took hold and combined with a strong job market and that did not happen.

2022– Here we are again and now we are seeing higher mortgage rates, lower mortgage applications, higher inventory, and a looming recession. All of this and rising rents will bring on our next housing crash. I think what we can say for sure is that the housing market is shifting as is everything else that surrounds us. We wish we could say for certain how long we will be here, but we can’t. What we can do is pay attention to what is going on and be here for our clients with real information not just catchy headlines to scare them.