Often, whenever some people talk about the real estate market, they bring up the housing crash of 2008, and you have to guide your clients and say, âNo, this is not 2008. This is what is actually going on with the market.â
So I had a client a few months ago, before things started to slow down who was looking at a multi-unit property in the Philadelphia area. And they said âJohn, why would I buy a home in a seller’s market? What happens if 2008 happens and a crash happens again?â And I asked them âDo you know why 2008 happened?â And they didn’t.
The government over the prior couple years had made policies to ease the standards to get a mortgage. They wanted minorities to be able to own homes. And that’s a great thing. Itâs great to look for a way to help people of all race, color, et cetera, to be able to afford homes.
The issue was there were years and years of expanded access to mortgages. Sometimes banks were giving out mortgages to people that really were not financially able to afford them.
Many people don’t know this. That’s why I’m talking about it here. This isn’t 2008, and it is our job to educate our clients. When they were giving out mortgages to people that could not afford them, those people then got foreclosed on. There were so many foreclosures, and they did not have equity in 2008.
Do you know what has happened since 2008? A lot. There are so many different safeguards in place now.
You need to teach your clients the facts. Tell them, âHey, this is why 2008 happened. Yes, it was awful, but this is what the mortgage industry has done to correct it so that it doesn’t happen again.â
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John Schuchman is a licensed REALTORÂ® in Lancaster, PA, with Berkshire Hathaway HomeServices Homesale Realty and a part of the Andrew Welk Group. The opinions shared on this show represent the opinions & values of John Schuchman and do not necessarily represent the opinions & values of Berkshire Hathaway HomeServices Homesale Realty. The opinions & ideas shared in this podcast do not guarantee or promise any results of success to the listener.
327: Business Update June 2023