The Hidden Truth About 4 Simple Graphs in Morgan Hill
Timothy Alston | Broker
Aegis Luxury Real Estate · DRE# 01328224
Published
February 17, 2022
Wine country meets Silicon Valley
Four simple graphs reveal why today’s housing market is nothing like the 2008 crash. Mortgage standards are dramatically tighter, homeowner equity is at record highs, foreclosures remain near historic lows, and housing inventory is still well below the six-month threshold that signals a healthy, balanced market. If you have heard the word “bubble” lately, these four data points are worth understanding before you draw any conclusions.
You know how it goes. Prices climb, someone mentions the word “bubble,” and suddenly a quiet worry starts forming in the back of your mind. If you are watching the Morgan Hill market right now, or thinking about buying or selling, that concern is completely fair. Nobody wants to make a six-figure decision right before the floor drops out.
But here is the part most people have not stopped to think about yet: what if the fear itself is based on a comparison that does not actually hold up?
What Does Your Current Housing Situation Actually Look Like?
Are you renting right now? Waiting to see if prices come down before you make a move? Or are you already a homeowner wondering if the value you have built could evaporate the way it did for so many people back in 2008?
Whatever your situation, it is worth asking: what are you actually basing that worry on? Is it the news? A conversation at work? A general sense that prices feel high? Those are real feelings, and they deserve a real answer, not just reassurance.
During the mid-2000s boom, mortgage lenders routinely approved borrowers with credit scores below 620, minimal documentation, and debt-to-income ratios that would be unthinkable today. Across Santa Clara County, including the Morgan Hill market, homes were purchased with little to no verified income. When values corrected, those thin financial cushions disappeared overnight, triggering the foreclosure wave that reshaped the entire region for years.
The 4 Simple Graphs That Change the Conversation
Simple graphs often tell the story that paragraphs of opinion cannot. When you look at the data side by side, the picture that emerges is not one of a bubble about to burst. It is one of a market built on fundamentally different ground than the one that collapsed in 2008. Here is what the graphs showing key market indicators actually reveal.
Affordability is stretched, but not broken. The affordability formula has three parts: home price, wages, and mortgage rates. Back during the housing boom, all three were working against buyers at the same time. Prices were high, wages were stagnant, and rates were above 6%. Today, prices are still high. But wages have grown, and even with recent rate increases, the average buyer is spending a smaller share of monthly income on a mortgage payment than buyers were during the boom. ATTOM Data Chief Product Officer Todd Teta has noted that the average wage earner can still afford the typical home across the U.S., though that comfort zone continues to shrink.
Does that mean affordability is easy? No. But it means the situation is measurably different from the last time around.
After the crash, foreclosure filings surged to levels that flooded the market with distressed inventory, dragging property values down across entire neighborhoods. In South Santa Clara County, short sales and bank-owned properties became a routine part of the landscape. Buyers who had used their homes like personal ATMs, pulling out equity as fast as it accumulated, found themselves underwater with no exit. That pattern created a self-reinforcing spiral that took years to unwind.
Lending standards are unrecognizable compared to the boom. One of the simple graphs showing the most dramatic contrast is mortgage volume broken down by credit score. During the housing boom, lenders issued enormous numbers of mortgages to borrowers with credit scores below 620. Credit.org classifies that range as subprime, meaning high credit risk and a history of delinquencies. In the fourteen years since the crash, that volume has dropped dramatically. The people who have received mortgages over the last decade are, on average, far more qualified. Can you see how that changes the foundation the market is sitting on?
Foreclosures are near historic lows. The Federal Reserve tracks new foreclosure notices over time, and the contrast between 2008 and today is stark. During the crash, millions of homeowners were pushed into foreclosure. Today, that number is a fraction of what it was. Even accounting for the pandemic-era forbearance program, Rick Sharga of RealtyTrac has pointed out that foreclosure starts declined even as borrowers exited forbearance, suggesting the feared wave never materialized. Most of those homeowners worked out repayment plans with their lenders.
Why? Because today’s homeowners are equity rich. Over 40% of homes nationwide carry more than 50% equity. Average home equity now stands at approximately $300,000. National tappable equity has climbed to a record $9.9 trillion. And unlike the last cycle, homeowners are not draining that equity. CoreLogic’s Homeowner Equity Insights report notes that equity gains have helped homeowners avoid distressed sales and continue building long-term wealth.
As the South Bay economy recovered, new construction failed to keep pace with population growth and job creation. In Morgan Hill, where developable land is constrained by geography and local planning, the gap between supply and buyer demand quietly widened through the mid-2010s. By the time the decade closed, the inventory shortage that defines today’s market was already years in the making, not a sudden spike driven by speculation.
The Inventory Story Nobody Is Telling in Morgan Hill
A healthy real estate market needs roughly six months of housing supply. More than six months creates a surplus, prices soften. Less than six months creates a shortage, prices rise. During the crash years from 2007 to 2010, inventory ballooned well above that threshold, flooded by short sales and foreclosures, and prices fell hard as a result.
Today the situation is the opposite. Inventory remains well below six months in most markets, including in Morgan Hill homes for sale listings, where buyer demand continues to outpace available supply. Homes in Morgan Hill are not sitting. Prices are rising because demand is real and supply is genuinely short. That is not bubble behavior. That is basic economics.
Have you ever stopped to think about what happens to your purchasing power if you wait another two or three years for a crash that the underlying data does not support? What does that waiting cost you, not just financially, but in terms of the life you keep putting on hold?
What Happens If Nothing Changes?
Here is a consequence worth sitting with. If you keep renting or waiting while Morgan Hill real estate continues on its current trajectory, where does that leave you in five years? The equity you are not building is equity someone else is building in their home. The payment that feels too high today could look like a bargain compared to what the same home costs after another cycle of appreciation.
That is not pressure. That is just the math. And it is worth running through honestly before you decide that waiting is the safe choice.
Based on what many buyers are telling us, the fear of a crash is real but not necessarily supported by the four simple graphs that show the actual structural differences between now and 2008. The data points to a market built on tighter lending, stronger equity, lower foreclosure risk, and insufficient supply. That picture looks a lot more like a stable market with limited inventory than a bubble about to pop.
Do you feel like this information changes how you are thinking about your next move? If so, the right next step is a straightforward conversation, not a sales pitch, just a clear look at where you are and where you want to be. Timothy Alston, Broker, is available at (408) 207-4593 to help you think it through on your terms.
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Broker · DRE# 01328224
Aegis Luxury Real Estate
Harvard Business School Online, Certified Master Negotiation
23+ Years Silicon Valley Real Estate Experience
Retired Military Veteran
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The data relating to real estate for sale on this display comes in part from the Internet Data Exchange program of the MLSListings™ MLS system. Real estate listings held by brokerage firms other than Aegis Luxury Real Estate are marked with the Internet Data Exchange icon and detailed information about them includes the names of the listing brokers and listing agents.
Based on information from the MLSListings MLS as of June 12, 2026. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information.
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Aegis Luxury Real Estate · Timothy Alston, Broker, DRE# 01328224 · 10080 N. Wolfe Rd Ste SW3-200, Cupertino CA 95014 · (408) 207-4593
Last updated: July 10, 2026 | Data reflects July 2026 MLS statistics
