Is The Market Going To Crash?

Are you wondering if the Jersey Shore real estate market is going to crash? In this video, we’re going to talk about what’s going on in the market and find out if it’s going to crash. We’ll find out how inflation, interest rates, and inventory are affecting the market so you can make the best choices for your future.

Supply And Demand

If you watch the news, you’re likely hearing a lot about inflation, interest rates, and inventory. But what’s really going on? Our last crash occurred between 2007 and 2014. Today, things are a little bit different; many things that were unprecedented back then are not happening today.

First and foremost, the real estate market is controlled simply by supply and demand. Ignoring interest rates for a moment, there’s still sky-high demand and very low inventory. I don’t think there’s going to be a major change in the market until we see those inventory levels—or the number of homes available for sale—increase.

Multiple Offers And Cash Deals

To see a crash, we’re going to have to see demand come down and the number of properties available for sale increase. That’s when you start to see a major shift in the market. However, we just haven’t seen it yet.

We’re still seeing multiple offers on a lot of our properties and a lot of cash deals. We’re also still seeing some of that craziness of waiving inspections—though not quite to the extreme that we saw in the past two years. However, you might see two offers on a property in two weeks, rather than seeing four offers in two hours.

All About Equity

Another thing that’s different in this market when compared to 2007-2008 is that everyone, for the most part, has a ton of equity in their home. If you think about it, values have to decrease rather significantly to get into an area where somebody is underwater on their mortgage or owes more than the home is worth. With property values increasing over 40% in the last couple of years, most people have a ton of equity.

What about all the bank-owned foreclosures? We’re not seeing any of that because everyone has equity. The only time that you lose your house to the bank is if you can’t pay your mortgage and you also can’t sell the house. But with plenty of equity, you can go ahead and easily sell your home or do a cash-out refinance at any time.


One of the reasons we have that is because these mortgage regulations now are much more strict than they were in 2007 and 2008. One of the things that led to that crash was that everyone was getting money. Today, you really have to be able to make the money to get the loan.

When it comes to mortgages, we do not have as many of those bad loans as we had 15+ years ago. The folks then had no doc loans, bank-only statements, interest-only loans, or really poor credit. We’re just not seeing as much of that any longer.

In today’s world, you have to make the money and show it on your tax return to get the mortgage in most cases. This means we have more secure buyers.

Inflation And Recessions

Lastly, real estate historically tends to do very well in an inflationary period—and you’ve already seen this. With inflation, the cost of everything is increasing. The good news is the price of your house has increased as well. So if you already own a home, congratulations: your value has gone up.

Historically, looking back, there have been market crashes in many markets where stocks and bonds crashed. However, real estate is a tangible asset, which tends to do very well even in a recession. Inflation actually tends to help these types of assets.

The Future Of The Market

When it comes to the state of the market, every week I’m paying attention to simple supply and demand—or what we call absorption rate. How long is it taking for the number of houses on the market today to go under contract and sell? If we start to see that increase significantly, it means there’s more supply available and less demand. That’s when we can become really concerned that there’s going to be a major shift in the market.

As of right now, we’re just not quite seeing that. If you have any questions about real estate, I’m here as a resource. You can reach me anytime at 609-604-5958. Make sure you also subscribe to my channel so you’re able to see our recent market reports and data concerning supply and demand. Stay tuned to see what I feature next!