Here are three reasons why you shouldn’t worry about a crash.

Some people believe we’re in a market bubble that’s going to burst and cause a wave of foreclosures. However, if you take a look at the numbers, it’s easy to see that this is extremely unlikely to happen. Here are three key reasons why we’re not on the verge of a crash:

1. The banks are ready this time: When the market crashed and caused a surge of foreclosures in 2007, the banks weren’t ready. The default servicing departments were understaffed, and they didn’t understand how to modify loans or deal with short sales. Now, the banks are prepared and have hundreds of employees who know how to deal with foreclosures.

“I don’t think foreclosures will negatively affect the market.”

2. People have equity: In 2007, a lot of people faced foreclosure because they had no equity and their property was vacant. They had a lot of motivation to get rid of their property, but it was hard to sell homes quickly. Because of this, they’d just stop paying and let the foreclosure occur. Today, most people in foreclosure or forbearance have equity in their property—their homes aren’t vacant. They can sell easily if they need to.

3. We have a big secondary market: Right now, every market has small investors looking for homes to flip, rent out, or sell. We also have institutional buyers who are looking to buy many properties and hold them forever. 

For these reasons, I don’t think foreclosures will negatively affect the market. If you have any questions or would like to talk about investing in real estate, feel free to reach out to me. I look forward to hearing from you soon.