Is there a real estate bubble that is about to burst?

Short answer…. No.

There is a bubble, but it won’t burst any time soon. The current real estate market is nothing like the market back in the mid to late 2000’s (pre-Great Recession) when everybody and their brother became builders and the market was saturated with homes for sale. This market is different because there is actually an extreme shortage or under-supply of homes in most price-points. Now, don’t get me wrong. I understand that markets can turn on a dime, and with the anticipated influx of foreclosures on the horizon, it does make me a little nervous and reminiscent of the 2008 crash. But this time we have an extreme need for more listings in the market.

Extremely low interest rates have made money cheap and have drawn more and more buyers into the market. The pandemic has caused shortages in everything from computer chips to lumber. These shortages have driven building costs to record highs and inhibited sellers from leaving their current homes for new ones and have created the biggest shortage of home listings and a seller’s market like we have never seen before. This seller’s market has pushed prices way up, with no end in sight. I believe the expected foreclosures will be welcomed, as investors will soak them up and flip them to the huge number of home buyers that have been fighting over the very few listings that have been available in this market over the past couple of years.

It is my hope and belief that as the pandemic draws to a close and the impending influx of foreclosures comes into the market we will see some relief in both construction costs and housing supply, giving more buyers the opportunity to own a home. This may bring a balance in the market, and a leveling out of home prices, or maybe even a slight decline in price, but no real “bubble burst”. I believe the overall real estate market is strong and will remain strong over the next several years.

Chuck McGee, Real Estate Appraiser/Broker/Owner – McGee Realty Services, Florence, MS


  1. Russell Roberts on July 24, 2021 at 6:54 pm

    Great article, Chuck! You should categorize it!

  2. Wyatt Roberts on July 25, 2021 at 3:37 pm

    Okay, let’s say hypothetically there will be a wave of foreclosures (not necessarily true). Where will those people live? What is the net effect and what would a savvy investor or real estate person do about it?

    • Chuck McGee on July 26, 2021 at 4:23 pm

      If a wave of foreclosures does occur, most of those people will be forced to become renters. The net effect would be a greater demand for housing, specifically for rental homes. A savvy investor would be buying up properties in anticipation of the demand for those rentals. Depending on the size of the wave, we may see inventory relief for the huge number of buyers in the market, which would allow prices to stabilize. If the wave is large enough we may see a slight decrease in price. But overall, this could be a huge opportunity for investors.

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