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The Freund Group Real Estate Update: February 25, 2021

The Market

The Housing Market Recovery Index (graph below) shows that people did take a break from buying and selling over the winter break, but you can see that people are coming back and are starting to make these important decisions.

The Year Over Year Changes in Key Metrics (graph) shows that last January and February were the two best months in real estate in the past 10 years and where we currently sit today is better than that. Although we do still have challenges with the lack of inventory, we still have a strong market. You can see on the next graph that purchase applications are high. As we take a look at the Year over year change in listings (graph below) we can see it’s lower than it has been since the ’80s.




So what does this mean? Although people may talk about the market and how scary and unstable they think it is. The data is showing the complete opposite. The data is stating that yes, the market recovery dipped as people took a break from being active in their real estate decisions, but are becoming more active now and we can see the trend on the graph recovering. Year over year changes in key metrics also shows that we are sitting in a better place today than we have in the last 10 years which is phenomenal.





Currently, there are 3 million people who cannot make their mortgage payments. It is projected for this to remain steady with people coming out of forbearance as well. There are about 325k people currently considered to be at risk for forbearance. KCM can be quoted saying, “87% of people that came off in July of 2020 are either on payment plans, paid off, or reworked their financials with their bank, these are all considered positive outcomes. The remaining 13% over the next 6 to 9 months without a plan in place will likely default”. As unfortunate as it is to see these families default, these homes will come to market and will likely be sold above list price. It is projected that foreclosures will rise, regardless of the pandemic. It can be expected to see foreclosures double or triple. All this said it is extremely important to present options and information to these people who may be at risk.

So what does this mean? There is a large number of people who cannot make their mortgage payments. The data shows that a large portion of these people came out of forbearance with plans in place. The remaining people who did not make a plan to get out of forbearance will likely foreclose. These foreclosures will bring homes to market and are expected to sell above list price.

The Bubble

Are we in a bubble? This is arguably one of the most asked questions in real estate right now. This is a valid question to be asked considering the current state of the market. The short answer to this question is, no. So let’s talk this out. How are we not in a bubble? First, let’s refer to the historic appreciation graph.

Actual home appreciating is over appreciating historic appreciating at 3.8%. The next graph for us to take a look at shows that homes have appreciated 10% over the last 12 months. Now, we jump over to look at the SF inventory graph.

When we look back at the housing bubble roughly 10 years ago we see some differences. First of all, in 2006 through 2008 it truly was a buyers’ market and then by 2010, 1 in 4 mortgages were ‘underwater’. Compare this to the current real estate market where it is very much a sellers’ market as well as the amount of equity that homeowners currently have and this is where the strength of the market lies.

Lastly, the real issue that is having light shed on it is that housing is not keeping up with our growing population. If you still have questions about this topic, we encourage you to reach out to our team or head over to and check out their blog specifically speaking and expanding on the reasons we’re not in a bubble.

So what does this mean? We are not in a bubble. Home appreciation is a huge reason for why we aren’t in a bubble. Homes have appreciated 10% over the last 12 months. All data is showing key differences of todays’ market versus the housing bubble 10 years ago. One part of those key differences is that it is a sellers’ market and not a buyers’ market. That paired with homes appreciating over historic numbers is a big reason why we are not in a bubble. This paired with the amount of equity that homeowners currently have, is where the strength of the market lies.


In closing, we agree with this data as well as its projections and want to encourage everyone to go to the data to answer your questions, not the news. We are not in a bubble and the data supporting this needs to be shared. There are a lot of opportunities to educate your database; postcards and blogs are great examples.

As always we are your friends in real estate, here for all your real estate needs.


The Freund Group with Compass Real Estate.

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