The Challenges and Opportunities of the Housing Market (Fall 2021)

Warren Oberholser
Warren Oberholser
Published on September 9, 2021

Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.

Is the housing market stable or in a bubble that is about to burst?

In this BLOG, I’m going to discuss what’s currently going on with our national residential real estate market and what it means to you, whether you are a seller or a buyer. Now, make sure you stay to the end because I’m going to give you my thoughts on the housing bubble.

Let’s get started

According to the National Association of Realtors, “the housing market took a slight dip in contract signing in July, but that could potentially mark an opening for home buyers who had been shut out by fierce competition over recent months. Pending sale sales dropped 1.8% in July compared to June”. Now, this has been down for two consecutive months. Only the west saw contract signing increase last month, but all major regions across the country posted year over year declines. Contract signing also dropped 8.5% nationally. knows the 10 most affordable cities include:

  • Pottsville Pennsylvania
  • Youngstown, Ohio
  • Wichita Falls, Texas

By the way, the majority of these cities are located in the Midwest. The chief economists from CoreLogic states, “If you’re working for a company in LA or San Francisco, where prices are sky high, you might feel you are locked out of home ownership, but some workers are able to pick up and relocate anywhere. It may be where the price of homes are 1/10th of what you’d pay in the Bay Area.”

Now, speaking of the Bay Area housing market, which is where I’m from, and more specifically is the Tri-Valley area, the housing market stats show that inventory is up and sales and prices are down.

Housing Market 2021: Sellers need to follow the 3P formula

What does all this mean? Well, if you’re a seller, you should follow what I call the three Ps:

  • Price
  • Prepare
  • Properly

This means price it right, prepare your home and properly and completely disclose everything!

Let’s go over each one.

  • Price it accordingly to the last comparable comp.
  • Prepare your home. Don’t remodel it, just make it present well.
  • Properly and completely disclose your home. This includes all the appropriate disclosures, especially the TDS and SPQ. If your home is a single detached home, I would recommend ordering the three main inspections, which are home, termite, and roof before you put it on the market.
The fall 2021 housing market could be a great opportunity for buyers

Now, if you are a buyer, this can be a great opportunity for a few reasons.

  • One, the housing market now has more inventory to choose from.
  • Two, more flexible financing to include FHA and VA loans. If you’re using conventional financing and are having a difficult time saving up for the 20% down payment, you may be able to get away with a conventional three to 5% down payment mortgage. This can be very helpful for the move up buyer who needs to sell their current residence. With more inventory. Sellers will be more accepting of a buyer’s offer that is contingent on selling their own home to finance the purchase.

The last opportunity for a more balanced housing market is being able to submit an offer with all your contingencies in place. This is for the investigation. If your offer is financed, which 75 to 80% of all offers are, appraisal and loan contingency.

Okay, let’s address it. Does this mean the housing market bubble about to burst?

What is a housing market bubble?

Let’s first address, what is a housing bubble? According to Investopedia,

“A housing market bubble or Real Estate Bubble is a run-up in housing prices fueled by demand, speculation, and exuberance spending to the point of collapse. Housing bubbles usually start with an increase in demand in the face of limited supplies, which takes a relatively extended period to replenish and increase. Speculators pour money into the market, further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices and the bubble bursts”.

After reading this, it kind of sounds like the current housing market could be in a bubble, however, to properly assess the housing market we need to break the definition up into a formula so we can compare it to our current market.

Let’s start with ‘running up the housing market fueled by’:

  • 1 Demand – Yes
  • 2 Speculation – No
  • 3 Exuberant spending to the point of collapse – Nah

The majority of new home buyers, especially in California, are millennials who have rented for a long time. They are gainfully employed, many were able to cash in their stocks to use for a large down payment, in some cases, 25 to 35%. Their loans are stable 30 year fixed mortgages with very low interest rates. They also had to meet stringent lending qualifications. The current housing market is made up of low inventory due to the housing construction shortage, coupled with highly qualified buyers using extremely low interest rates.

I feel the recent slowdown is a result of pushing the market so fast with the extreme spring run-up, combined with a break in the summer due to the semi-normal activities. We are still dealing with the recent outbreak of COVID 19 Delta Variant. This allows more inventory to come on.

I still feel what will change the residential housing market is the raise in interest rates. Will it happen this year? I don’t know. With the unemployment rate going up., maybe not, but next year there will be a raise. Now, will it go to 4%? I don’t know, but it will go up.

California unemployment claims up

National unemployment claims down

I hope you enjoyed this article. Please let me know if you have any questions. Warren


Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!

Warren Oberholser

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Warren Oberholser

eXp Realty

[email protected]

(925) 980-4603

DRE # 01861944


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