The real estate industry experienced rock bottom since last year. Thanks to the remote work culture brought by the coronavirus global pandemic. The health crisis also resulted in an unstable housing market, despite the demand from buyers moving from one state to another.
But as home prices continue to rise and affordable housing inventory is nowhere to find, consumers are starting to wonder what is happening to the housing market. Curious buyers crawl into the world wide web to search for answers.
Google recently reported that the question "When is the housing market going to crash?" has reached a record-high search of 2,450% during the past month.
The question was followed up by "Why the market so hot?" which Google search doubled in just a week.
Surprisingly, people are also curious to know how much they could cash in on the red hot housing market. The question "How much over asking price should I offer on a home 2021" also jumped 350% in that same week.
Not a Housing Bubble
According to the National Association of Realtors (NAR), these top Google searches about the housing market only show that consumers are concerned about the status of the home prices and bidding wars. However, NAR chief economist Lawrence Yun said that the market's current condition is different now than the previous hot market.
"This is not a bubble," Yun told Axios.com.
"It is simply lack of supply."
Based on NAR's data, the country has over 1.03 million houses for sale available in the market. It is a record low yet far from the peak of more than 4 million inventory at the height of the 2017 housing bubble. However, the number of active listings was down by 54% last week, compared to the previous year's data, as per realtor.com.
Meanwhile, according to real estate brokerage Redfin, the buyer demand remains high for some housing inventory. When April started, at least 42% of houses for sale are selling for more than their listed price, a 16% increase compared to the same period last year.
"The housing market is more competitive than we've ever seen it, but a couple indicators are causing us to ask whether we're nearing a peak in terms of how fast demand and prices can grow," Redfin chief economist Daryl Fairweather said.
"Sellers' asking prices may be starting to flatten in what so far appears to follow a typical seasonal pattern," he added, as reported by Realtor Magazine.
Worrying Consumer Mindset
Meanwhile, CoreLogic chief economist Frank Nothaft says that the top Google search about overpaying is quite bothering.
"I have to admit I'm worried when I hear that. It does make me concerned," Nothaft told CNBC.
"That's the mindset that comes in because that means it's an auction market," he added.
The decline in mortgage purchase applications only shows that some potential buyers are dropping out of the market due to the lack of affordable housing inventory. If the trend continues, Fairweather said that we are "not in the midst of runaway home price speculation or a housing bubble."