Reply to I think the bubble is popping.

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[quote=Anonymous][quote=Anonymous]The only people who think there will not be a steep market correction are real estate professionals and people who just bought houses.

The market slows at the height of the summer every year. I firmly believe a market correction is in the near future regardless. 
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Why?  Just because?  You have a "gut" feeling?

Under normal situations, the real estate market is a simple supply/demand model.  The more people that want to buy in a location, whether it is a booming urban center, it has a good school, it is close to a popular attraction, etc, the more prices will go up.  That is offset by supply.  If a large influx of homes come into the market, like a new development or condo community comes on-line and becomes available, then the costs to down.  More supply, prices down.  More demand, prices up.  And vice versa.  The things that tend to change this are financial and economic pressures.  The last big correction from 2008-2010, occurred because of the subprime mortgage crisis.  That was an artificially created bubble where the mortgage industry spent the early 2000's enticing many more buyers into the market with "too good to be true" mortgage products and when those products adjusted, the buyers who bought more than they could afford lost their shirts, many homes foreclosed or went to short sale and the prices corrected.

In the DC area, population is still growing steadily at 1+% per year and more corporations and businesses are increasing their footprint in the metropolitan area, which will only add to the steady growth.  Barring another financial crisis, the problem is one of supply and demand.  The population is growing faster than the available housing increases.  So, demand continues to exceed supply.  As long as that happens, without an external factor, there will not be a market correction.

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