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Google data shows: Fear of a crash on the US real estate market is great

The Americans are worried because, as a current Google analysis shows, the question “When will the real estate market collapse?” Is increasingly being typed into the search engine.

As Google Trends recently published, the number of previously mentioned search queries increased by a total of 2,450 percent in March 2021 alone. In addition, the Americans were also looking for explanations why the real estate market is currently so hot and why real estate prices are rising steadily, reported Google. These increased searches are in response to the extremely competitive US market. “When we see prices rise as fast as we do, it might bring back memories of the last time for some,” Matthew Speakman, an economist at Zillow, told MarketWatch. “Following robust growth over the past five years, the nationwide nominal house price index is now 40 percent above its 2012 low and 4 percent above its 2006 high. If 2006 was a historic bubble, the current price level should be looked at more closely,” MarketWatch quoted JPMorgan as saying Research.

Germany is not spared from the trend either

The concerns of Americans are more than understandable in view of the latest developments, because on average house prices in the USA rose by 10.6 percent, while individual cities even struggle with increases of up to 26 percent. In addition, more than 42 percent of the properties were sold above their value in April alone. Compared to the previous year, this is an increase of a proud 16 percent. This reports Focus.de and warns that not only the USA is struggling with an uncertain real estate market. Germany is also affected by the trend and prices are also rising sharply in this country. The reason for this development is the general uncertainty and the nonetheless increased demand, because while many are refraining from selling their real estate due to the current situation, more and more people are simultaneously looking for a house or a condominium in order to take advantage of the low lending rates. The Federal Statistical Office recently announced that in the fourth quarter of 2020 alone, the price of houses and condominiums rose by 8.1 percent year-on-year. That is the strongest increase in four years.

Is a real estate bubble looming now?

Although the real estate market in the USA and also in Germany seems to be more than uncertain at the moment, some experts are certain that neither country is threatened by a real estate bubble. Daryl Fairweather, chief economist at the analysis firm Redfin, which specializes in real estate prices, told CNBC: “We are by no means in the midst of galloping prices or even a bubble”. She is certain that some local markets could experience a correction and that nationwide prices will simply rise less rapidly soon. Fairweather sees the reason for this in two different developments. On the one hand, she is convinced that the supply is likely to increase again as the pandemic eases and, on the other hand, she assumes that lending rates are currently rising slightly, which will make financing more expensive and thus prevent some from buying a home. In their opinion, a comparison with the situation before the financial crisis in 2007 does not seem obvious, since the US has since tightened its credit rules significantly.

 

 

The article Google data shows: Fear of a crash in the US real estate market is great first appeared on investing in real estate.

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