Real estate experts in the Kansas City area are reacting to last week’s warning from the Federal Reserve Bank of Dallas about a potential housing bubble.Federal Reserve analysts warned U.S. house prices are again becoming “unhinged from fundamentals,” like the housing boom before the 2007-2009 global financial crisis.However, the analysts said they did not expect fallout of the same magnitude as the recession in the late 2000s.In a March 29 article citing real-time monitoring, the analysts said prices can continue to rise when there is widespread belief today’s “robust price increases will continue.””If many buyers share this belief, purchases arising from a ‘fear of missing out’ can drive up prices and heighten expectations of strong house-price gains,” the analysts said.A bubble is created when demand for housing outpaces supply, causing prices to rise at a high or alarming rate.”For me, a bubble is defined as a price that can’t be justified,” said Colby Venegas, a real estate agent. “But we’re seeing those prices justify. These houses that are selling are appraising.”Venegas said rising mortgage rates may level the current seller’s market. This week, interest rates on a 30-year-fixed mortgage hovered near 5%. During the pandemic, those rates remained in the 2-3% range.But Venegas also said tight housing supply remains a significant factor to keep prices from crashing, she said.”As long as the inventory is lacking,” Venegas said. “You are going to see those prices continue to rise.”Kevin Laffey, senior vice president of sales and business development at Inlanta Mortage, said the Fed’s use of the word bubble means different things for different real estate markets. “I think the challenge there is if that message gets out there, then people wait,” Laffey said. He said mortgage rates could continue to rise in the coming months, also saying Kansas City’s real estate market is relatively stable, compared to other markets like Florida.He said if there is any sort of housing price correction, it would be a gradual smaller dip than in other areas of the country.Both Laffey and Venegas said it is vital to have a well-connected real estate agent, lender, and other real estate experts on your side, especially with tight supply and competition for homes.Read more of the Federal Reserve’s housing bubble warning, here.
Real estate experts in the Kansas City area are reacting to last week’s warning from the Federal Reserve Bank of Dallas about a potential housing bubble.
Federal Reserve analysts warned U.S. house prices are again becoming “unhinged from fundamentals,” like the housing boom before the 2007-2009 global financial crisis.
However, the analysts said they did not expect fallout of the same magnitude as the recession in the late 2000s.
In a March 29 article citing real-time monitoring, the analysts said prices can continue to rise when there is widespread belief today’s “robust price increases will continue.”
“If many buyers share this belief, purchases arising from a ‘fear of missing out’ can drive up prices and heighten expectations of strong house-price gains,” the analysts said.
A bubble is created when demand for housing outpaces supply, causing prices to rise at a high or alarming rate.
“For me, a bubble is defined as a price that can’t be justified,” said Colby Venegas, a real estate agent. “But we’re seeing those prices justify. These houses that are selling are appraising.”
Venegas said rising mortgage rates may level the current seller’s market.
This week, interest rates on a 30-year-fixed mortgage hovered near 5%. During the pandemic, those rates remained in the 2-3% range.
But Venegas also said tight housing supply remains a significant factor to keep prices from crashing, she said.
“As long as the inventory is lacking,” Venegas said. “You are going to see those prices continue to rise.”
Kevin Laffey, senior vice president of sales and business development at Inlanta Mortage, said the Fed’s use of the word bubble means different things for different real estate markets.
“I think the challenge there is if that message gets out there, then people wait,” Laffey said.
He said mortgage rates could continue to rise in the coming months, also saying Kansas City’s real estate market is relatively stable, compared to other markets like Florida.
He said if there is any sort of housing price correction, it would be a gradual smaller dip than in other areas of the country.
Both Laffey and Venegas said it is vital to have a well-connected real estate agent, lender, and other real estate experts on your side, especially with tight supply and competition for homes.
Read more of the Federal Reserve’s housing bubble warning, here.
