I hope this letter finds you well as we navigate this craziness. One of the things we are getting asked constantly is whether or not we are in a “bubble” in the real estate market currently. This is a question many experts are conflicted on as well. The purpose of this letter is to give you some insight into why I think we are NOT in a bubble and, as a homeowner, what that means for you.
Before we begin the discussion of if we are or aren’t, here is a bit of perspective.
All of these factors affect the price and availability of homes
Now, my opinion, we are not in a bubble and here are 6 reasons we know we aren’t:
At least in our area, our existing market was actually behind. Right now we are at a 102 cost of living index. 100 is the national average. We (Nashville MSA which includes Rutherford County) only crossed the 100 mark less than 2 years ago. Note that the 102 is a composite and our housing piece of that is 113.3 right now (13.3% higher than national average). The point is, we have been a bargain for a LONG time and were due to go up quite a bit.