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| LIFE IN SOLERA | MARCH 2023 | 25 If you have a vivid memory of the housing market crash of 2008 and 2009, you may have concerns that we are moving toward another housing market crash. It's true that home sales prices have been declining ever since mid-2022. If you follow the statistics on the back page of this newsletter, you know that's true in Solera as well. So, what's different now from 2008-2009? First, predatory lending practices in the first years of the 21st century meant many homeowners faced foreclosure when adjustable interest rates rose, and unemployment further increased the number of properties in foreclosure. Housing demand was artificially propped up by issuing mortgages to people who weren't in a good financial place to buy and maintain a home, and the economic downturn also meant buyer demand plummeted. Home values declined significantly as a result. The current situation is very different than the Great Recession, says Rick Sharga, executive vice president of market intelligence at real estate data company ATTOM, based in Irvine, California. "Mortgage delinquency rates are actually lower than they were prior to COVID," he says, noting that 2019 was in itself a mild year for foreclosure activity, historically speaking. "Ninety-three percent of borrowers who are in foreclosure today actually have positive equity in their homes, … which gives these distressed homeowners a couple different options for a soft landing," Sharga says. Reynolds points out another major difference between today's market and the housing crash is the issue of supply – excessive building leading up to 2008 meant that when demand dropped, there were entire housing developments that sat vacant. Moving to 2023, housing is still catching up on the low rate of building compared to household formation since the Great Recession. "There are fewer homes per household than there was back then," Reynolds says. With today's homeowners, laws and regulations have been in place to prevent predatory lending since the Great Recession. Even though interest rates have increased, there are still qualified buyers searching for homes for sale. All these factors combined, Reynolds says he and his colleagues agree that "a crash at this point is unlikely." (Source: U.S. News) What's Different Now Compared to the 2008 Housing Market Crash? By Diana Mangan, Realtor and Resident