Will Housing Market Crash In 2017?

Q: Gerald, I just read an article that said that 2017 could end up being the year of the great housing crash. What do you think? Andrew, Watertown, MA

A: Andrew, real estate in general is an illiquid investment, which means that unlike in the stock market where a stock’s price could potentially drop to zero in one day, real estate prices really don’t move that fast. If we reached an inflection price and were headed toward a real estate market downturn and ultimately a housing crash, there would be indicators that we could see before that happened, like an increase in housing inventory for sale on the market. When houses sit on the market for a long time and don’t sell, sellers ultimately lower their prices which then triggers other sellers to lower their prices in order to compete.

While I’m reluctant to make market predictions because I unfortunately can’t tell the future, I do not think local real estate markets in the US will crash in 2017 and even if we were going in that direction, we’d see a lot of unsold houses on the market before that happened.

Thanks for your question, Andrew. Good luck.

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