We'll discuss three main points in our September Houston Housing Market Update.
Hey everybody. This is Haley Brenner with Realty Kings Properties. I hope that you're having a great summer and ready for fall season, sweater weather, football season, all the fun stuff. But I'm here to give you guys a market report for real estate nationally and here in Houston and really what's been going on this whole year.
I'm going to answer three main points. These are questions that I've been getting a lot lately. So the first one is are we in a housing bubble? So are we in a bubble? The answer to that question is no, we are not in a housing bubble. And I'm going to start with a quote from Harvard's most recent State of the Nation's Housing Report. And they said this, "These outside increases have raised concerns that a home price bubble is emerging. However, conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in prices instead reflects strong demand amid tight supply, helped a little bit by record-low interest rates."
So basically, what's happened during the pandemic is that the home became everything to us. I mean, it's where we work. It's become our gym and our home. And so because of that, everybody wanted to buy. They realized we need to change. Maybe that's making a move to a new city, a bigger home, whatever the case may be. But everybody wants to buy. And we simply don't have enough inventory homes for sale to meet that demand. So compared to the normal pace of 3 to 5% increase in home prices year over year, right now the average forecast is nearly 11.5%, which is significant. However, the home price appreciation now is for a completely different reason, which is supply and demand, than what we saw for the crash in 2008. And so as interest rates and prices continue to rise, we expect to see a slow in home price appreciation, but not a dramatic depreciation. So the short answer is no, we don't feel that we're in a housing bubble at this point.
The second point I wanted to cover is will we see a wave of foreclosures coming onto the market? So the answer to this one is all of the forecasters are saying we will not see a huge wave of foreclosures that hit the market because nearly 87% of individuals that are still on a forbearance plan have over 10% equity in their homes. And so what does this mean? It means that these homeowners could sell their home, protect their investment, and avoid the foreclosure process. And experts are estimating that the number of foreclosures will be around 200,000 to 300,000, which will be nearly enough to make up the inventory shortage that we're experiencing in this country. To make up the amount of homes that we need right now, it'd take about four million homes hitting the market. And so these 200,000, 300,000 homes that we're expecting to be foreclosures, they're going to get snapped up right away, probably by cash buyers or investors. And so if you're one of those buyers waiting for all these foreclosures, it's not going to happen. And so that's the answer to that question.
The third one is seller's or buyer's market? Is there a shift happening? There is a shift that's starting to happen in real estate. And I'm going to jump into the Houston Association's of Realtor data over this past week. Showings we're actually down 19.3% and online listing views were down 18.8%. So we're still in a seller's market, and there are still bidding wars happening. But there's not as many buyers in the market in these bidding wars. And so, hopefully, that gives all the buyers out there some hope there won't be as much competition. But for sellers, it is still a good seller's market.
And so if you guys have any questions about your situation or what might be right for you, feel free to give me a call. https://www.realtykingsproperties.com/agents/haleybrenner/ I'm happy to talk through all of the different options. So thank you guys for watching and I'm looking forward to next month's update as well.