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Wednesday, May 10, 2017

Is Southwest Florida in a Housing Bubble?

Is the southwest Florida real estate market in another housing bubble? I’ll explore five reasons why you shouldn’t worry about it today.

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Lately, I’ve been hearing a lot of chatter about a real estate bubble. People are worried about another market recession, with steep downturns in prices. Are we in a real estate bubble and is it about to burst? 

I would say no, and there are five reasons why: 

1. The southwest Florida market is the second-hottest market in the nation, according to Trulia.

2. Prices are on the rise. In Florida, home prices went up 7.3% compared to this time last year. Florida is one of the strongest states in the nation when it comes to price appreciation. Here in southwest Florida alone, prices rose 10% year over year, giving the average homeowner a $30,000 bump in equity. 

3. Existing home sales are on the rise. Home sales are up 5.9% compared to this time last year. 

4. Pending home sales are well above healthy levels. While some upper-end markets like New York City or Los Angeles have cooled off, our pending home sales are at 10%. That is a slight drop from 18%, but it’s still very strong. 

5. Interest rates are still at very low levels. You can get an interest rate in the lower 4% range, making money cheap for traditional homebuyers and for investors. 
We are not in another housing bubble.
All in all, I don’t believe that we will see another housing bubble anytime soon. If you have any questions about buying or selling a home in our current market, just give me a call or send me an email. I would be happy to help you!