Published July 13, 2022

Popping Bubble Myths | Kelly Nicolaysen

Written by Rick Moore

Popping Bubble Myths | Kelly Nicolaysen header image.

The number one thing I hear from buyers is "I'm waiting for the bubble to burst." Now I would be lying to you if I didn't admit I thought the same thing 3 years ago. This feeling of the bubble is very near and dear to us, we were all around in 2007.

Yes, I too bought into the far-fetched hope that the market would crash and I would get my dream home for mere pennies (insert evil genius laugh here...)

But here's a secret: there is no bubble and there will be no bursting *gasp*. That's right the bubble isn't real, and I would still be waiting!

Let me break it down without too much boring jargon. Picture this: you're going on a hike with your buddy and you've never hiked before. They tell you "listen, it will be easy, it's just a little hill." Think of that as your adjustable rate mortgage- easy, obtainable, not steep. You're locked in.

Now as you summit your little hill, feeling good, your buddy breaks the news that little hill was just the tip of the iceberg. Now there's a mountain, it's pretty high and decently steep. This is your rate changing and this isn't what you thought it was. With each step you feel yourself falling behind, you just can't keep up.

Oye! That's a long way up.

You think to yourself, it's ok! I have backup, I have value, I have snacks! Only to realize your buddy said you wouldn't need snacks and you have brought nothing of value to help you out of this situation. So you decide to throw in the towel and head back down the mountain to the land of foreclosure.

This was the experience back in 2007, no clue of the obstacle to come- just pure trust in your hiking buddy (lender). But since that catastrophe in 2007, much has changed. Stricter regulations have helped make excessive lending a thing of the past. We can thank our friends Dodd-Frank for the revision of bad lending practices. Thankfully, today, no creditor may issue a mortgage loan without determining in good faith the customer can pay back that loan in full.

Now imagine, you go back to that mountain today. You've been preparing, you got snacks (down payment monies) and now there's a map at the trailhead and a park ranger to ensure you're ready for the trek ahead. This time feels different, more obtainable. You summit that bad boy with your snacks in hand realizing you had more snacks (value) than you thought possible.

Phew, made it to the top. (Snacks not pictured)

So don't count on any kind of bubble popping anytime, that mal-practice was nipped right in the bud. Have you been putting off climbing that mountain? Have you been hoping they just put an escalator to the top? Well quit it! Don't wait around for this imaginary bubble to pop, you'll be waiting a very long time. Let's get your snacks prepared and find that trail map so you can summit that mountain to your dreams.

With that being said, there is a small bubble and it's fluctuating. Interest rates. We are seeing a roller coaster of up's and down's with in this year alone. Rates have been increasing steadily (and dramatically) the last 6 months. Currently, rates have dropped for the third week in a row and while we don't have a crystal ball (a Realtor's favorite saying) it looks like the Fed is promising more rate hikes throughout the year.

Now is the time to reach out and learn about local, transparent lenders to lock in your rate. As the real estate market is ever-changing, the Rick Moore Group is steadfast in adapting to changes to make sure you're ready for the trail ahead.