Why the Real Estate Crash Isn't Coming

One of the most common things I hear from buyers is: "I'm waiting for interest rates to go down" or "I think home prices are going to drop." And every time, I get concerned. The reality they assume and the reality we're living in, from my perspective, are two completely different worlds. Here’s why.

The Wealthy Are Buying Up Assets

During the pandemic (2020-2021), we witnessed one of the greatest transfers of wealth in history. Billionaires became richer than ever before, and now they’re looking for places to park their money. What’s one of the safest, most stable assets they can invest in? Real estate.

According to a Forbes report, high-net-worth individuals and institutional investors have been purchasing homes at record rates, particularly in markets where inventory is tight. If there were a looming crash, why would they be buying now?

Interest Rates and Their Impact

Many people are waiting for interest rates to drop, and while it's likely rates will come down at some point, the idea that home prices will simultaneously crash is unrealistic. Historically, when rates go down, demand skyrockets, which leads to higher home prices due to competition.

President Trump has openly criticized Federal Reserve Chairman Jerome Powell, pushing for rate cuts. If the Fed does lower rates, expect a surge of buyers jumping back into the market. And what happens when more people compete for limited homes? Prices go up.

Housing Supply and Demand

The housing shortage is not improving. Here in Los Angeles, we already have one of the worst housing shortages in the country, and projections show it will only get worse. The number of people needing homes continues to rise, yet the pace of new construction is nowhere near keeping up.

Simple economics tells us that when demand is high and supply is low, prices hold steady or increase—not crash.

“Marry the Home, Date the Rate”

There’s a phrase we like to use in real estate: “Marry the home, date the rate.” Home values generally rise over time, so locking in a home at today’s price means you benefit from appreciation. As for your interest rate? That can be refinanced later when rates drop.

If you’re serious about buying, waiting for a market crash that isn't coming could mean missing out on the best time to buy.

Final Thoughts

The real estate market isn’t headed for a crash. The wealthy are buying because they know it’s a solid investment. Interest rate drops will bring more competition, not lower prices. And with a persistent housing shortage, home values are expected to remain strong.

Instead of waiting, consider getting into the market now and benefiting from long-term home appreciation. If you have questions or want to explore your options, let’s connect!