DON’T Fall For It: Housing Market Crash LIES | Guest Post

Everywhere you turn there are headlines screaming that the real estate market is about to collapse citing that homes are over-priced, unaffordable and sitting on the market too long. January’s real estate market data didn’t do a lot to dispute the screams as inventory, price cuts and days-on-the-market increased. Personally, as a top 200 lender in the United States, just this week I’ve had sellers sharing that they feel a need to sell now before the market crashes. And buyers wanting to wait a little longer. 

These attention-grabbing headlines make for compelling content, and soft data can give you pause, but is a bubble really about to burst?  Let's dive into an evidence-based analysis of where the housing market actually stands in early 2025.

Understanding Market Fundamentals

The key to assessing market stability lies in examining core fundamentals and fact-based data rather than following dramatic click-bait predictions. If you’ve spent any time on YouTube, you’ve probably come across a number of crash bros such as Nick Gurley and Michael Bordenaro. Nick’s content is practically a crash countdown—constant claims that we’re on the brink of another 2008-style meltdown. But here’s the thing: Nick’s been making these same predictions for years. And many people who follow his advice missed out on building equity wealth and locking in historically low mortgage rates. The truth is, doom-and-gloom content grabs attention and builds profitable channels, but that doesn’t make the predictions accurate.

Three Critical Factors

Three critical factors shape today's market dynamics, starting with the supply-demand balance. Current inventory levels while higher in specific markets, is historically low nationwide, creating a natural price floor. Despite higher interest rates dampening buyer enthusiasm, the fundamental shortage of available homes continues to support market stability. New construction, meanwhile hasn't been able to keep pace with population growth with Zillow still estimating the US housing market is short by 4.5 million homes. Current pressure on the costs to build a new home will continue to maintain pressure on existing housing stock.

Another crucial factor is homeowner financial health. Unlike the 2008 crisis, today's homeowners are in a much stronger position. Strict lending standards implemented after the last crash have resulted in a more resilient borrower pool, evidenced by the near record lows for both mortgage delinquencies and foreclosures. Plus, most homeowners today have substantial equity reaching nearly $35 trillion in 2024 resulting in an incredibly safe 31 percent loan-to-value nationwide. This provides an equity cushion against market fluctuations and reduces foreclosure risks. Now, there are conversations around higher credit card and student loan debt, however, this is disparagingly affecting renters over homeowners.

The broader economic context also plays a vital role. Primarily with the labor market remaining incredibly resilient.  Unemployment is up slightly from 2023, but has stayed flat for the last eight months. Wages dropped from their pandemic peak but have had a hard time breaking below a strong 4 percent annual growth rate with job gains remaining consistent and initial jobless claims remaining at a 10-month low. A resilient labor market and economy create the foundation for a stable housing market. While affordability challenges are real, they typically lead to market adjustments rather than catastrophic collapses.

The Cycle Theory Perspective

Real estate traditionally moves through predictable cycles, but external forces can disrupt these patterns. The pandemic created unprecedented market conditions that we're still processing. The combination of record-low interest rates drove exceptional price appreciation, while remote work sparked migration patterns that reshaped local markets. Government interventions altered normal market mechanics in ways we're still understanding. As these unusual factors normalize, we're seeing expected adjustments - but these shouldn't be confused with a market crash.

Local Market Variations

National trends provide context, but real estate remains intensely local. Some markets are experiencing price corrections while others maintain steady appreciation. The variations in market performance are driven by regional economic strength, population movement patterns and local building regulations. Housing supply elasticity in different regions creates distinct market dynamics that can't be captured in national headlines or broad predictions.

Investment Implications

For long-term homeowners and investors, current market conditions present both challenges and opportunities. While the era of rapid appreciation may be pausing, fundamental factors supporting housing values remain intact. Population growth continues to drive housing demand across many regions, while higher construction costs maintain upward pressure on home values. The persistent scarcity of land in desirable areas also provides additional support for price stability over the long term. Remember, while there are short-term corrections in home prices, long-term home values always go up.

Looking Ahead

Rather than a dramatic crash of housing bust proportions, market indicators suggest a period of normalization and in some markets a slight softening. We can expect to see more negotiating opportunities between buyers and sellers, with longer selling timelines becoming the norm. Price growth is likely to moderate slowly returning to historical averages. This particular housing market with more recent inventory, less buyer competition and slow price growth is exactly what buyers have been waiting for.

In my home state of Colorado, Denver closed home prices saw a very moderate 2 percent home price growth in 2024 and have started 2025 up 1.77 percent year-over-year. Over the long term, however, Denver’s strong demand, restricted housing supply and steady population growth are expected to support a modest price appreciation of 0 to 3 percent this year. The key is understanding that these changes represent a return to traditional market dynamics rather than a systemic failure.

Making Informed Decisions

Ultimately, your housing decisions should reflect your personal circumstances rather than market timing speculation. The most successful real estate decisions typically arise from careful consideration of your long-term housing needs, financial readiness for homeownership, and local market conditions. Personal risk tolerance plays a crucial role in determining the right time to enter or exit the market. These factors matter far more than trying to time market cycles or react to dramatic headlines and predictions.

Conclusion

While dramatic market crash predictions may generate clicks and views, they often oversimplify complex market dynamics. Today's housing market faces challenges, but the fundamental factors supporting stability and long-term wealth creation remain intact. Focus on your personal housing needs and financial situation rather than dramatic headlines when making real estate decisions. Real estate success typically comes from patient, well-researched decisions, not reactive moves based on unsubstantiated market predictions. Whether you're considering buying, selling, or holding, let me know in the comments below! I’m Nicole Rueth, your trusted mortgage advisor and real estate expert, helping you build wealth through homeownership, one smart, educated decision at a time.  And hey, don’t forget to like, subscribe and share this video with someone who’s looking at buying a home or investment in today’s market. I’ll see you in the next video!

The views, opinions and positions expressed within this guest post are those of the author alone and do not necessarily represent those of the Denver Metro Association of Realtors®. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

If you are interested in submitting a guest post, please contact Sarah Webber at swebber@dmarealtors.com.