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The bubble in the real estate market? Americans wonder when an accident will come

Google search queries explode in US: “When will the real estate market crash?” American citizens and Germans are asking for themselves

During the Corona era, the U.S. real estate market plunged to unimaginable heights – with house prices rising by up to 26 percent in a year. As Google is now proving to all people, there is great concern that some of these markets will collapse soon.

“When will the real estate market crash?” Is a question that Americans are currently interested in. The number of such search queries has increased by 2,450 percent in the last month alone, according to search engine provider Google. Anyone looking to buy a home in the United States faces a much hotter market. If you want to sell your property, rub your hands. “How much above the current value should I give a property?” Even a popular search query.

There is a definite answer. 42 percent of all assets were sold above their true value in April. This is up from 16 percent a year ago. Prices have risen significantly. Across the United States, it rose to an average of 10.6 percent, but private cities also reported an increase of up to 26 percent. Most of them are in Western America, where wealthy Californians live Corona– Escaped the crisis. Boise, the capital of the state of Idaho, is a leader in the nationwide sector. Only a quarter of the regions saw prices rise by less than 10 percent.

The trend is similar in Germany

Prices are rising sharply as the corona has created greater imbalance between supply and demand. The number of people wanting to sell their property has plummeted. Anyone who owns a home in difficult economic times is reluctant to take part in it. However, on the contrary, more and more young people are being pushed into the real estate market and they are benefiting from lower debt rates. Buying a home Would like to use.

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This is a trend that can be seen in Germany as well. Federal Statistics Office housing and at the beginning of the month Condominium In the fourth quarter of 2020, year-on-year prices rose 8.1 percent – the strongest increase in four years. In big cities, especially in the top 7 places Munich, Berlin, Hamburg, Stuttgart, Cologne, Frankfurt And D டுsseldorf, Prices also rose 12.1 percent on average.

On both sides of the Atlantic, fears of a bubble are rising, meaning property prices will rise uncontrollably for long periods of time – and will therefore fall again in the future. This would be a disaster for homeowners and banks. Borrowers should expect higher levels of bad debts that they can no longer repay.

Experts in the real estate market do not see a bubble

But experts in both countries also promise. Daryl Forever, chief economist at Redfin, an analytics firm that specializes in real estate pricing, says: “We are by no means expensive or in the middle of a bubble. to “CNBC“. Some local markets, he thinks, can see a correction, and nationwide prices will soon be very low.

In their opinion, this is confirmed by two improvements: first, the supply is likely to increase again as the epidemic eases. Second, debt rates are currently rising slightly, making finances more expensive, so some may be encouraged to buy a home. The situation before the financial crisis of 2007, when many Americans actually bought homes they could not afford, was not like that. The United States has since tightened its debt rules significantly.

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What can stop the price cycle

In Germany, Creditான்nstalt for Viteropov (KFW) in March examined whether the current market is causing concern about the formation of a bubble. Here, too, the experts came to the opposite conclusion. Although prices have risen significantly in recent years, this is offset by lower interest rates. Unlike the United States, there are no signs that lower interest rates in the eurozone will end abruptly in the coming years.

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Only population growth – Germany’s population is growing very slowly – can stop the price cycle. But even then, there will be more of a smooth brake than a sudden burst bubble.

This is good news for property owners. In most German territories you can expect the value of your property to continue to rise in the coming years. Sees the warning sign KfW Only in rural areas that are structurally weak and already struggling with population decline, and in cities such as Berlin, Hamburg and Munich. It is not possible to estimate here whether the home office trend will attract more people from the city to the surrounding area. This may put pressure on prices under certain circumstances.

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