Home prices continue to rise, especially in the East Boca Raton market we generally focus on. The rising prices are a result of the area being in high demand and not enough homes for sale to meet that demand.
Buyers are willing to pay more to live in East Boca, but they simply aren’t happy with the current selection of homes. They believe the homes are overpriced, especially since many of them need substantial remodeling.
Why is the inventory so low? Because people are happy living in East Boca and they want to stay. Most homeowners realize they’re sitting on considerable equity but where will they go if they sell their homes? If they sell to cash out, they’ll then have the difficult task of finding another East Boca home they like and can afford. The only people selling their homes in East Boca are elderly people looking to downsize, people that are being relocated by their employers, and people that absolutely need a larger home.
Now, back to the original question as to whether or not this is another real estate bubble. Experts are saying that, at present, there’s no bubble. Low inventory and low interest rates are typically not signs of a bubble.
More importantly, real estate bubbles always burts. There’s nothing to burst now, because there are no worthless bonds full of sub-prime mortgages that belong to people who can’t afford to pay them. That was the root cause of the housing market and overall financial collapse back in 2007/2008. #thebigshort
The graph at the top is a little scary though right?
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