Despite bidding wars in many areas of America, existing home sales dipped 0.9% from April to May, according to the National Association of Realtors (NAR), marking the fourth month in a row of small declines. Meanwhile, amidst fears of a housing bubble, all regions saw double digital annual gains.

Sales are “approaching pre-pandemic activity,” said NAR’s Chief Economist, Dr. Lawrence Yun. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.”

“The market’s outlook, however, is encouraging,” Yun continued. “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”

MBA AVP of Economic and Industry Forecasting, Joel Kan also sees a silver lining. He said, “One positive development was the 7 percent increase in for-sale inventory, which should slightly help price conditions.”

The median home price in May rose 23.6% over the year to $350,300, a record high and the 111th consecutive month of year-over-year gains.

The average days on market was unchanged for the month, remaining at 17 days, down from 26 days in May 2020. Fully 89% of homes sold in the month were on the market for less than 30 days.

Dr. Yun expects the 30-year fixed rate mortgage to remain below 3.5% in 2021, with a rate of 2.96% in May, down from 3.06% in April, according to Freddie Mac.

In the Northeast, sales fell 1.4% in May, but skyrocketed 46.9% from May 2020. The median price rose 17.1% annually to $384,300.

The Midwest experienced a 1.6% uptick for the month, and 27.2% for the year. The median price rose 18.1% for the year to $268,500.

In the South, sales slid 0.4%, up a whopping 47.2% from May 2020. Here, the median price rose 22.6% to $299,400.

Finally, home sales in the West declined 4.1% for the month, but saw a 61.6% increase from the previous May. Sale prices rose 24.3% over the year to $505,600.

NAR recently called on lawmakers to take “immediate” and “once-in-a-generation” action regarding the current housing supply crisis, so we’ll be watching for how the market is impacted in coming months.

The housing market is crazy right now, with some attributing soaring prices to business as usual and others warning that those same prices are indicative of a bubble—one that, some fear, is close to bursting and triggering another recession. Whether you’re looking to buy or you’re simply window-shopping, here are some valid arguments for both sides of the issue.

A common argument for the existence of a housing bubble includes the issue of rising housing costs, with experts pointing to a strong upward trend in house prices as proof of an invariable crisis. On paper, this is an argument that makes sense since it mirrors the events leading up to the crash of 2006.

However, the reason the market crashed in 2006 has less to do with high prices and more to do with an abundance in risky loans and high interest rates—two things that don’t exist in today’s market. Adjustable rates are also virtually nonexistent for mortgages issued in 2021 (according to Bloomberg, only 0.1% of those mortgages allowed for interest adjustments) while around 60% of mortgages awarded in 2006 carried adjustable interest.

Bloomberg also points out that, between the aforementioned price hikes and common demand, most homeowners are situated to sell at a profit these days. This helps prevent the foreclosure issues evident in the crash of 2006.

Combine a high demand for homes and a relatively short supply of them (in comparison to decades past), and the market seems pretty tight for now—certainly not attributes one would expect leading up to a housing crisis.

But that isn’t to say that there isn’t cause for concern; there are a few reasons why the current housing environment could collapse.

Firstly, while it isn’t fair to compare current prices to their 2006 counterparts, it is fair to point out that the market will eventually hit a ceiling—something that often precedes a crash. Markets fluctuate all the time, but real estate tends to do so more slowly and over longer periods of time—and the market has been rising for long enough that a crash seems inevitable. It isn’t entirely out of the realm of feasibility to be worried about that.

Banks are also starting to invest in cryptocurrency, and, as the primary financiers of real estate endeavors, that could bode really poorly for people looking to get loans should the (very real) cryptocurrency bubble burst. Banks like Goldman Sachs have hired crypto investment specialists to avoid such a catastrophe, but the fact remains that cryptocurrency is still a wildcard—and, in a market that craves stability, that’s a problem.

On a different note, Finimize pointed out that JPMorgan reported an anticipatory drop in earnings from trading during the current quarter, which could also be an ill omen: If trading is slowing down, it could preempt another crash.

Frankly, this could go either way and nobody would be terribly surprised. While it does seem like the market is stable enough to prevent a catastrophe of 2006 proportions, you won’t catch anyone making fun of you for preparing for a drop in the near future.

As a realtor or brokerage owner, you know the importance of understanding your community’s ecosystem in order to shape your business strategy.

However, have you considered how environmental and quality may play a role in those decisions?

This study published in Cancer suggests that you should. According to the study, “of every 100,000 Americans, 451 of us will get cancer in a given year.” The study “found a difference of 39 cases (per 100,000) people, between areas with the highest and the lowest environmental quality.

This establishes a significant link between environmental qualities and cancer risks.

The study also showcases a map of the US and the air quality of various regions. Red and orange areas have the worst air quality, while blue and green areas have the best air quality. As you might expect, large metropolitan areas have the worst air quality, and things improve as you move into more rural areas. You do find the most exceptions throughout the southeastern region and a vertical stretch that runs from the tip of Texas to the Dakotas up north.

These kinds of signs can either be a major benefit or a major obstacle to attracting buyers to your real estate market.

According to the most recent Gallup polls, 47% of Americans worry a great deal about the quality of the environment. So, how do you adjust?

If you’re in a blue or green area, make sure to get the word out! People now consider environmental quality as part of the quality of life factor. Don’t let that benefit go unnoticed. Blog about it on your own website. Use your social media to share data like this from other sources, or other information praising the environmental quality and protections of your market.

Integrate it into your marketing materials where possible.

If you’re in a red or orange area, you’ve got a bit more work to do here, and it’s going to get a bit political. There is already plenty of concern about attempts at the federal level to handicap agencies dedicated to protecting the environment. Be wary of such measures at the state and city level, and be a voice for the real estate economy in shaping this policy.

Does going to places of legislative businesses give you the heebie-jeebies? Find local organizations dedicated to improving environmental quality. Sponsor a river or park clean up event. Show your support for events like Earth Day. Don’t have those kinds of events? Harness your entrepreneurial spirit and bring these events to your community. Taking action as a community leader will be massively beneficial for your brand.