David Gordo: “We are not facing a real estate crisis

The real estate crisis is a recurring theme these days after the sales data obtained during and the situation that arises for both in real estate and financial terms. Concern has been established among Spaniards, since the idea of ​​a real estate crisis in like the one experienced during theeconomic crisis is looming over the market. Sell ​​your house getting more for less Paying a lot to receive little is a thing of the past. GET INFORMED FOR FREE No one knows the evolution of the real estate market better than our Head of Large Real Estate Accounts and one of our ambassadors , David Gordo . For this reason, in our Blog he details the current situation of this market and what we can expect from it in thanks to his extensive experience in managing commercial networks in the real estate sector in American, traditional and proptech models.

Uncertainty in the purchase and sale of real estate

There is no doubt about the uncertainty that currently exists in the buying and selling market . The rise in interest rates on mortgages and the increase in home prices in recent years, among many other factors, are directly influencing the decision of whether to buy or sell a home in this final stretch. In particular, it is interesting to look at the position that buyers adopt in these times, who, because of this uncertainty, “if there is no real need to purchase, they prefer to wait to apply for a mortgage and buy their property ,” says David. Fat. Recommended reading: Euribor forecast inAre variable mortgages going to rise? The rise in interest rates and the real estate market It was somewhat to be expected that the increase in interest rates by the European Central Bank (ECB) would have a direct impact on the real estate market. Our Head of Large Real Estate Accounts points out that “at the moment there is a decrease in demand due to the ECB’s measures, which has especially begun to be detected in the purchase of New Construction properties .” Apparently, there is uncertainty among New Construction home buyers, who do not know today how much money they will have to pay for their mortgage loan once their property is delivered, whose terms are usually around 12 months. Therefore, these buyers are slowing down the decision-making process to buy a home, which makes the time it takes to sell a home longer.

A real estate crisis in 2022?

Contrary to what is currently believed, the situation of the real estate market does not meet sufficient conditions for a new real estate crisis to occur. David indicates that this fact is very clear “if we compare it with the real estate market that occurred during the economic crisis of where family indebtedness was much greater than what there is now and the risk assumed by banking entities to through mortgage loans was much higher than the current one” and, therefore, “we are not facing a real estate crisis.” In addition, there is talk of the appearance of a new real estate bubble, which is also very unlikely to occur today, since as David points out, “the main ingredient for a real estate bubble to occur is a lot of demand and little. supply , that is, a lot of interest in buying properties and little supply of them”, a fact that is currently not occurring. The procedure that the real estate bubble follows is cyclical: it develops over a period of time and causes housing prices to rise. Subsequently, it generates demand and there comes a time when it is punctured and produces a decrease in demand and housing prices. But, if there were one, could a real estate bubble be avoided? David is very clear in his answer: “no.” And apparently, “ what the real estate bubble ultimately does is purify the real estate sector and balance supply and demand , as happens in any other sector.