Are all of the Forbearances going to cause a market crash similar to what we had in 2008? As of February 14th, The Mortgage Bankers Association had information on this and it looks like we are in pretty good shape.
84% of people who entered into Forbearance are either out of it or working through it to set up repayment plans. 50.8% are paid in full, 33.6% worked out a repayment plan and only 15.6% are still in trouble.
It’s important to understand what’s happening with Forbearances and the numbers, since many are continuing to go down, and as of now, only about 5.22% of all mortgages are in Forbearance.
We keep hearing all this information in the news about how we are going to crash because Forbearance is so high, but if you look at the real facts, that just isn’t true. For 2021, according to all of the experts they are forecasting an increase of 5.9% on average, for appreciation in home prices for 2021.
Also, there is concern and scary headlines that the market will crash because of home prices increasing so quickly. However, if we compare the Average Price in home appreciation from 2002 to 2005 leading up to the 2008 crash, the average annual appreciation was 10.3%. If you look at now, from 2017 to 2020 the average annual appreciation for home prices is only 6.3% which is drastically less.
It’s a very different situation today than it was back in 2008. It’s easy to listen to the news, but it seems there is a lot of hype and negativity around what is happening and it is not based upon actual facts.
If you’re thinking of selling your home here in the Oakland / Berkeley area, give me a call.
I’m a Top Producing Realtor® in the OAKLAND / BERKELEY EAST BAY AREA. I’ve been in the East Bay since I came up to do my undergrad at UC Berkeley (a long time ago!), with a short stint at UC Davis while getting my Master’s. I take my duties as a Realtor® and Fiduciary very seriously, I enjoy educating my sellers and buyers along the way. Putting People, Before Profit.